Schroders Online Annual Report 2021
Annual Report and Accounts 2021

Annual Report and Accounts 2021

WE LOOK
BEYOND

Annual Report and Accounts 2021

Annual Report and Accounts 2021

WE LOOK
BEYOND

Annual Report and Accounts 2021

Annual Report and Accounts 2021

WE LOOK
BEYOND

Annual Report and Accounts 2021

Annual Report and Accounts 2021

WE LOOK
BEYOND

Annual Report and Accounts 2021

Annual Report and Accounts 2021

WE LOOK
BEYOND

2021 Financial highlights

Net income before exceptional items

£2,568.8m

(2020: £2,179.2m)

Profit after tax

£623.8m

(2020: £486.0m)

Total dividend per share

122p

(2020: 114p)

Profit before tax and exceptional items

£836.2m

(2020: £702.3m)

Basic earnings per share before exceptional items

244.8p

(2020: 200.8p)

Total equity

£4.4bn

(2020: £4.1bn)

Profit before tax

£764.1m

(2020: £610.5m)

Basic earnings per share

220.8p

(2020: 172.4p)

Total capital ratio

27.7%

(2020: 26.2%)

Leadership statements

Michael Dobson

"2021 was another strong year for Schroders both in terms of our financial results and in extending our opportunities for future growth."

Download Chairman's statement
Strategy Eye

Strategy

Focused on three strategic priorities

Our strategic vision is underpinned by a diversified business model which builds in resilience to changing economic conditions and is combined with an emphasis on three strategic opportunities for growth.

Our focus

Build client longevity and sustainable margins through trusted adviser relationships in Wealth Management.

We continue to build our leading Wealth Management business, in which clients can benefit from the breadth of our expanding investment capabilities.


Our progress in 2021

Our achievements in establishing a leading position in wealth management is sustained by our long history of family ownership, international institutional investment expertise, private assets capabilities and our leadership in sustainability.

Accelerating our UK wealth management growth: We have expanded our presence in the high-net-worth segment, by setting up four additional hubs outside of London and the South East. The acquisition of Sandaire in 2020 was part of a strategic plan to expand our family office capabilities and gain share of this growing market.

Building relationships with financial advisers: We have attracted new financial advisers to our technology-driven wealth management business, Benchmark Capital and have taken advantage of opportunities to expand our service offering across the network.

Generating client referrals via Schroders Personal Wealth: Referrals have increased and net new business has turned positive in our joint venture with Lloyds Banking Group, Schroders Personal Wealth. Opportunities in the UK advice market remain strong and through Schroders Personal Wealth we focus on accelerating future growth.


Growth opportunities
  • Positioning for accelerated growth in the affluent sector through Schroders Personal Wealth and Benchmark Capital.
  • Increasing client longevity from family office services in Europe and Asia by building on our acquisition of Thirdrock in Asia and Sandaire in the UK, as well as our existing Swiss and Channel Islands businesses.
  • Increasing market share through our UK regional wealth expansion plans outside of London and South East.
Our focus

Focus on developing distinctive capabilities that enable us to deliver excellent investment performance

Product innovation ‐ with a focus on sustainability ‐ allows us to be distinctive, while expanding geographically enables us to deliver our investment capabilities to new clients. We invest seed capital to support these initiatives.


Our progress in 2021

We are increasing our focus on complete investment solutions, ensuring we remain relevant and centred on clients' needs. We aim to increase client longevity and use our data and digital capabilities as a competitive advantage.

Building our sustainability ambitions: We have broadened our sustainability offering with a range of funds in our European fund range now classified as either Article 8 or Article 9 under the EU's Sustainable Finance Disclosure Regulation (SFDR), and we expect to launch more funds in 2022 globally.

Evolving our Solutions capabilities: We announced the acquisition of River and Mercantile's UK solutions business, which will enhance our ability to meet the increasingly complex needs of our pension fund clients.

Innovating and renewing our Mutual Fund product set: We launched a number of thematic funds and aim to maintain relevance to the needs of our clients through innovation in our Mutual Fund product set.

Growing our business in North America: We reached nearly £90 billion of AUM in North America, driven by strong inflows from institutional clients and our relationship with Hartford, totalling £3.2 billion of net new business.

Progressing our presence in China: We continued to progress the set up of our wholly-owned fund management company business and new wealth management company venture with Bank of Communications. The latter gained regulatory approval to commence operations in January 2022.


Growth opportunities
  • Further product innovation to build and maintain a distinctive offering in sustainable investing.
  • Position our capabilities as a strong solutions provider globally.
  • Continue to diversify our global footprint with opportunities in the Americas and Asia, particularly China.
Our focus

Meet increasing client demand for additional portfolio building blocks and alternative sources of return.

Our Private Assets and Alternatives business area consists of our private markets business (Schroders Capital) and our liquid alternatives business. Schroders Capital gives investors access to an additional range of portfolio building blocks and customised private asset strategies whilst our alternatives business offers clients access to liquid third-party hedge funds and other investments.


Our progress in 2021

Our Private Assets and Alternatives teams have a track record of delivering good investment performance for our clients. We now have a presence in all private market asset classes, including private equity, real estate, private debt and infrastructure. The GAIA (Global Alternative Investor Access) platform gives clients access to alternative investments via Schroders and third-party funds.

Strengthening the range of our capabilities: Our range of asset classes now includes private equity, impact investing, insurance linked securities, securitised credit, infrastructure and real estate, across which we have experienced strong organic growth, contributing positively to the Group.

Launching Schroders Capital: We unified the way that we present our private assets capabilities, gathering all of our existing private assets businesses under a single brand. The brand was created to deliver an enhanced service for our clients.

Expanding our capabilities with strategic acquisitions: We reached an agreement to acquire Cairn Real Estate, which will provide us with Dutch real estate expertise.

We also announced the acquisition of a leading European renewable infrastructure specialist, Greencoat Capital. Channelling private capital for the energy transition required to achieve a net zero future will become increasingly important as governments around the world look to accelerate towards this goal.

Growing organically across the platform: Public-private strategies, Australian private debt, real estate debt, securitised credit and impact investing have all continued to contribute organic expansion across the platform.


Growth opportunities
  • Scope to scale the comprehensive product set we have built by leveraging our global distribution strength.
  • Material opportunities to benefit from widening accessibility of private markets in the future.

Business Model

Our Business model is designed to deliver for our stakeholders

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

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. Our approach is underpinned by our capabilities, which opens up our expertise to every client.

By active and intelligent use of technology

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

By motivating and nurturing employees

The success of our business model relies on our people. We nurture a culture that allows the individual and the company to make the most of their skills.

Deep expertise in all asset classes

For more than two centuries we have evolved our understanding of markets and the offering we take to clients. The products we offer span private assets and alternatives, fixed income, equities and multi-asset.

Actively driving the growth of our business

We have expanded 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.

Our global expertise


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

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 £700 billion of assets, we can channel money to benefit society. The decisions we make as both a corporate and an investor are mindful of the impact and implication for the world beyond Schroders.

Taking decisions to benefit our people

We champion inclusion and diversity and make health and wellbeing a priority. That creates the conditions for our people to thrive. Our culture is the cornerstone of our business.

Contact Schroders

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