ACCELERATING POSITIVE CHANGE
THE POWER OF ACTIVE DECISION-MAKING
RESILIENCE THROUGH DIVERSIFICATION
FOCUSED ON RESPONSIBILITY
2020 financial highlights
Net income
Basic earnings per share before exceptional items
Assets under management
Profit before tax and exceptional items
Basic earnings per share
Net new business
Profit before tax
Total dividend per share
Total equity
Assets under management
By asset class
By region
By business area
Leadership statements
Chairman
Michael Dobson
"Our business philosophy is based on the belief that if we deliver for our clients, we deliver for our shareholders."
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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
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 reviewA 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.
Business model
We are driven by our purpose
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
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.