Schroders, a global investment manager, has released its financial results this week for 2022.

Despite challenging markets, Schroders wealth management business performed well in 2022, with net operating revenues up 10 per cent, compared with the previous year, reaching £394.3 million ($471 million).

Its wealth management advice businesses delivered strong organic growth of 6.6 per cent, exceeding the target for the year, the firm said in a statement. Schroders high net worth, ultra-high net worth and charities businesses, and specifically its Cazenove Capital advised business in the UK, were key factors behind this, generating organic net new business growth of 8 per cent, the firm continued. 

The principal drivers were the build-out of Cazenove's business owner franchises across the UK regions where it attracted talented advisors in Birmingham, Leeds, Bristol and Manchester; strong investment performance in volatile markets, which continued to reduce attrition and led existing clients to add to their portfolios and refer new clients; and Cazenove Capital’s reputation in sustainable investment which attracted new UHNW clients, family offices and charity clients. 

Since winning the "ESG Olympics," a public tender showcasing the specialist expertise of 59 wealth managers, Cazenove Capital has seen flows from sustainable mandates grow significantly, representing gross flows of about 80 per cent for its charity business this year. 

Net operating income increased by 6 per cent, compared with 2021, reaching £406.8 million. Assets under management closed the period slightly lower at £98.1 billion, due to the impact of market movements, the firm said. Operating expenses came in at £276.9 million, compared with £254.2 million in 2021, as a result of its investment in people and technology platforms. 

More broadly, Schroders net operating revenues, excluding performance fees and net carried interest, increased by 1 per cent, and net operating income fell slightly to £2,475.5 million from £2,520.0 million in 2021. 

Operating profit reduced to £723.0 million, from £841.0 million in 2021, whilst profit before tax was £586.9 million, compared with £764.1 million in 2021. Profit after tax was £486.2 million, from £623.8 million in 2021, as the firm was further impacted by mark-to-market movements on balance sheet items and acquisition-related costs including amortisation, the firm said.

Assets under management ended the year 4 per cent lower at £737.5 billion, compared with £766.7 billion in 2021. The board also recommended a final dividend of 15 pence per share, bringing the total dividend for the year to 21.5 pence per share, representing a payout ratio of 57 per cent of operating earnings per share. The final dividend to shareholders on the register will be paid in May.

Peter Harrison, group chief executive, said: “The market challenges of 2022 provided a stress test for our strategy. The businesses we have been building in recent years – across wealth management, private assets and solutions – performed strongly. They are all playing an increasingly important part in our growth and now represent 53 per cent of the group's AUM. Schroders Capital, our private assets business, had a record year with £17.5 billion of fundraising, with particular strength in real estate and private equity.” 

Meanwhile, the firm believes that forecasts for markets and the global economy in 2023 remain mixed.