The London-listed investment house saw its wealth management profitability decline despite a surge in assets under management.

Schroders’ wealth management arm saw its pre-tax profit dip 10 per cent year-on-year to £42.7 million ($53 million) in the nine months to 30 September 2016.

The division’s profit before tax and exceptional items, however, was up at £49.5 million, compared to £46.5 million in the corresponding period of 2015. Net operating revenue was £162.6 million versus £157.6 million a year earlier. Despite net outflows of £500 million, the unit’s assets under management rose 15 per cent year-on-year to £35.6 billion.

Pre-tax profit at Schroders’ asset management arm declined from £391.3 million to £386.8 million. Its net operating revenue for the first nine months was £1.07 billion, compared to £1.03 billion a year earlier. Performance fees were up from £12.7 million to £13.3 million.

For the company as a whole, pre-tax profit stood at £436.2 million at the end of September, up marginally from £438.9 million a year ago. Total assets under management increased 26 per cent to £375 billion.

“Our diversified business model generated £2.7 billion of net new business and assets under management increased to £375.0 billion. We have made progress against our strategic objectives, particularly in North America,” Schroders’ group chief executive, Peter Harrison, said in a statement.

The company also reported results for its group segment, which comprises central costs and returns on investment capital. For this, pre-tax profit in the first nine months was £6.7 million, compared to a pre-tax loss of £100,000 a year earlier.