ACCELERATING POSITIVE CHANGE

ACCELERATING POSITIVE CHANGE

THE POWER OF ACTIVE DECISION-MAKING

THE POWER OF ACTIVE DECISION-MAKING

RESILIENCE THROUGH DIVERSIFICATION

RESILIENCE THROUGH DIVERSIFICATION

FOCUSED ON RESPONSIBILITY

FOCUSED ON RESPONSIBILITY

2020 financial highlights

Net income

£2,179.2m
(2019: £2,124.8m)

Basic earnings per share before exceptional items

200.8p
(2019: 201.6p)

Assets under management

£574.4bn
(2019: £500.2bn)

Profit before tax and exceptional items

£702.3m
(2019: £701.2m)

Basic earnings per share

172.4p
(2019: 178.9p)

Net new business

£42.5bn
(2019: £43.4bn)

Profit before tax

£610.5m
(2019: £624.6m)

Total dividend per share

114p
(2019: 114p)

Total equity

£4.1bn
(2019: £3.8bn)

Assets under management

By asset class

Asset classes Chart
Equities
33%
Multi-asset
29%
Fixed Income
17%
Private Assets & Alternatives
8%
Wealth Management
13%

By region

Assets by region chart
UK
48%
Asia Pacific
18%
Europe, Middle East and Africa
19%
Americas
15%

By business area

Business areas chart
Private Assets & Alternatives
8%
Solutions
33%
Mutual Funds
18%
Institutional
28%
Wealth Management
13%
Leadership Statements

Leadership statements

Michael Dobson

Chairman

Michael Dobson

"Our business philosophy is based on the belief that if we deliver for our clients, we deliver for our shareholders."

Download Chairman's statement
Peter Harrison

Group Chief Executive

Peter Harrison

"We invest in the best interests of our clients to accelerate positive change in the world."

Download Group Chief Executive's statement
Richard Keers

Chief Financial Officer

Richard Keers

"Our diversified business model has enabled us to deliver a robust set of results, as we continue to make progress against our strategic objectives."

Download business and financial review

A year of action

A year as challenging as 2020 offered a test of corporate character and a test of purpose. We met the challenge, as a corporate and as a steward of our clients' capital. We honoured our pledge to integrate sustainability measures within our investment processes. We went further, building tools to assess the impact, both positive and negative, of the companies we invest in. Our corporate initiatives on a range of environmental and social issues accelerated, improving the sustainability of our business. Our people, who in the face of adversity responded very well, made us proud. Their professionalism maintained standards and services, ensuring business stability.

January

For society

Signed the UN Global Compact, the world's largest corporate sustainability initiative

February

For society

Started a three-year charity partnership with Samaritans in the UK as part of our commitment to improving mental health and wellbeing

March

For our people

Published our fourth consecutive Gender Pay Gap report, demonstrating continued commitment to equality and inclusion in the workplace

April

For our people

Committed to not making any Covid-19 related redundancies or using government support schemes

May

For shareholders

Paid our final dividend for 2019

For society

Raised £4.3 million in support of more than 90 charities

June

For our people

Our LGBTQ+ group organised virtual Pride celebrations around the world, raising money for Albert Kennedy Trust and True Colors United

July

For society

Joined forces with Jamie Murray to sponsor the 'Battle of the Brits' tennis tournament and raise money for NHS Charities Together


Participated in global 'Plastic Free July' movement

August

For clients

Cazenove Capital won gold in the ESG Investing Olympics

September

For shareholders

Received an 'Excellent' investment management quality rating from Fitch Ratings for the 16th consecutive year, demonstrating the viability of our business over the long term

October

For our people

Celebrated 'Inclusion Month' with a series of virtual activities and an inclusion survey of employees worldwide

For clients

Established a regional Centre of Excellence for Sustainability (CoES) in Singapore

November

For society

Ranked in the Social Mobility Index for the first time, highlighting us as an employer doing the most to change how they find, recruit and advance talented employees from different social class backgrounds

December

For shareholders

Calculated our own SustainExTM score to be +3.1% (compared to industry average of -0.3%)

For society

Awarded an A- score for our 2020 CDP submission

For clients

Achieved full ESG integration across our managed assets

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Business model

We are driven by our purpose

Business Model Compass

Why we do what we do

To provide excellent investment performance

Our purpose is to provide excellent investment performance to our clients through active decision-making.

To channel capital to support businesses

We actively select companies with sustainable and durable business models; those that are evolving to survive and thrive in the challenges of the decades ahead.

To help accelerate positive change

We actively select forward-thinking companies, but we also support them in their journey to a fully sustainable future.

How we deliver for clients

By designing innovative products and services

We strive to understand what clients want and apply this to the funds we offer and the bespoke solutions we develop. Because of our deep relationships and use of technology, we can track and respond to these changing needs. This is underpinned by our carefully designed structure based on capabilities, which opens up our expertise to every client.

By active and intelligent use of technology

Technology and data is at the heart of our ceaseless push for investment excellence. Our award-winning SustainEx™ impact measurement tool is one example.

By motivating and nurturing talented employees

Our business model wouldn’t work if our people were unable to thrive. We nurture a culture that allows the individual and the company to make the most of their skills.

What differentiates us

Deep expertise in all asset classes

Our heritage is unique. For more than two centuries we have evolved our understanding of markets and therefore the offering we take to clients. Today, we comprise five business areas: Private Assets & Alternatives, Solutions, Mutual Funds, Institutional and Wealth Management.

Actively driving the growth of our business

We have grown into areas of exceptional growth potential. We can offer access to private markets as equally as public markets. We are a leading specialist in impact investing. We look forward and we change.

Global expertise

Our investment capabilities span the globe. But so does our extensive distribution infrastructure which brings the best of the Schroders proposition to our clients wherever they are.

Creating value for our stakeholders

Delivering returns for clients and shareholders

With a long-term shareholder base we can take a long-term view, in our careful decision-making for the company and for clients.

Taking decisions to benefit society

We know that as stewards of more than £500 billion, we can channel money to benefit society. Equally, every decision as a corporate entity is mindful of the impact and implication for the world beyond Schroders.

Taking decisions to benefit our people

We take immense pride in our culture. By promoting flexible working, championing diversity and making health and wellbeing a priority, we have created the conditions for our people to thrive. This culture is the cornerstone of our business.

Strategy Eye

Strategy

Delivering long-term value for our clients

Changes in the investment industry continue to gather pace. Our strategy looks decades ahead; it is carefully designed to benefit our clients, as we further diversify our business model towards higher demand areas.

Grow Asset Management

Our focus

We focus on offering products and solutions that are distinctive and of pinpoint relevance to each client.

Product innovation is key to future proofing our business. As is geographically expanding our reach so we can serve more clients in more jurisdictions. To stay relevant for all our Asset Management clients, we are increasingly providing complete solutions. Reducing the level of intermediation between investment solutions providers and end clients increases client longevity and revenue margins. All these initiatives are underpinned by progressively using technology as our competitive advantage.

Our progress in 2020

We have made significant progress this year towards our sustainability ambitions and achieved full ESG integration into the financial analysis of our managed assets. We now have a comprehensive range of sustainable funds with more fund launches in the pipeline next year. In the US, we have broadened our presence in the institutional space and have continued our strong relationship with Hartford. We have made progress strengthening our onshore presence in China from a distribution and investment perspective and have now been granted permission to obtain a licence to serve retail clients as well as institutions. We also reached an agreement to establish our second joint venture with Bank of Communications. We will jointly be setting up a Wealth Management Company. Our Solutions business grew significantly last year and achieved £43.4 billion of net inflows, mainly driven by the transfer of assets under the Scottish Widows mandate

Growth opportunities

We see material upside in our continued product innovation programme which helps maintain our strong position in sustainability. This is one of our key ambitions for our business, alongside being a strong Solutions provider for our clients globally.

We expect growth from an increasingly diversified global footprint and see opportunities in the Americas and Asia.

Developing a range of innovative products that achieve positive outcomes for clients is essential. We invest seed capital to support these initiatives.

Build closer relationships with end clients

Our focus

End investors can benefit from the breadth of our expanding investment capabilities.

We have the opportunity to leverage our global investment expertise to build a leading Wealth Management franchise. Wealth Management is an attractive business area where trusted adviser relationships lead to greater longevity and higher, more sustainable margins. Schroders' long history of family ownership, our international institutional investment expertise, our Private Assets capability and our sustainability research are key strengths in building a leading Wealth Management business.

Our progress in 2020

In the UK, we completed the purchase of Sandaire, adding to our strong multi-family office franchise, and from this we integrated an additional £2.4 billion of AUM. Cazenove Capital, our UK high-networth brand, continued its UK regional expansion to leverage Lloyds Banking Group's (LBG) business bank relationships and target business owners. It also accelerated its growth organically and improved its digital, private assets and sustainable offering. Benchmark Capital expanded its IFA network, generated record profits and successfully migrated Schroders Personal Wealth clients on to its platform. Whilst referrals from LBG were impacted by the pandemic, Schroders Personal Wealth laid the foundations for future growth with new leadership and improved IT infrastructure.

Growth opportunities

We will continue to grow our presence in the UK wealth market across all segments. Schroders Personal Wealth and Benchmark Capital are well-positioned to grow post-lockdown in the affluent segment. We also see opportunities to build on our acquisition of ThirdRock in Asia and Sandaire in the UK, as well as our Swiss and Channel Islands businesses, to create a leading family office service in Europe and Asia.

Expand Private Assets & Alternatives

Our focus

Build on the surging client demand for new alternative sources of return.

Our Private Assets business is built to provide investors with a range of portfolio building blocks and customised private asset strategies. Our teams have over two decades of experience in delivering risk-adjusted returns in all private asset classes, covering private equity, real estate, private debt and infrastructure. We offer access to alternative investments via our GAIA (Global Alternative Investor Access) platform, which offers Schroders and third-party funds. The continued expansion of our Private Assets & Alternatives business remains a strategic focus for the Group.

Our progress in 2020

In recent years we have extended our Private Assets capabilities, and our offering includes private equity, insurance-linked securities, securitised credit, infrastructure and real estate. All of these asset classes have experienced strong organic growth and contributed positively to the Group. We have strengthened our management team, including our real estate team, and completed the purchase of a majority stake in Pamfleet, a Hong-Kong based real estate manager. We have also started several organic expansions across the platform including public-private strategies, Australian private debt, real estate debt, securitised credit and impact investing. The development of our dedicated Private Assets sales team has continued globally and we are confident that our clients are benefitting from a specialised approach to client service focusing on local requirements and supported by a global perspective.

Growth opportunities

We continue our focus to grow the contribution to the Group's revenues of our Private Assets & Alternatives business to 20% over the medium term. That means becoming the private assets provider of choice for clients by offering innovative products and by scaling up the businesses we have acquired. Building on our strong track record and deep expertise we also see significant opportunities to further develop our Private Assets capability with innovative structures and to establish ourselves as a leader in the ESG and impact investing space.

Contact Schroders

Schroders is a world-class asset manager operating from 37 locations across Europe, the Americas, Asia, the Middle East and Africa.