Corporate Slide Deck For Global use May 2013
Agenda About Schroders Investment Capability Product Service/Distribution (Sales and Marketing) Global Marketing Distribution Support 2012 UK Marketing Distribution Support 2012 European Marketing Distribution Support 2012 Our Success – PR, Awards and Ratings – Fund Buyer Focus – Position in key markets and share – Investment performance Corporate Slide Deck | May 2013 1
About Schroders
Schroders A trusted heritage Schroders commenced business in 1804 The family and related trusts control around 45 per cent. of the voting shares £236.5/ € 279.7/$359.2 billion of funds under management 34 offices in 27 countries: more than 3,000 employees, including 367 Investment Professionals, of which: – 188 fund managers – 179 analysts, strategists and economists More than 580 funds within Schroders group globally Strong balance sheet and stable ownership structure Rating ‘Highest’ by Fitch Ratings* A dedicated asset manager Proven capacity to adapt and innovate – Now a diversified business by channel and geography – Long track record of product development and innovation All data as at 31 March 2013 *Source: Fitch, as at 25 January 2012 , awarded to the global business. M1 description, superior: Asset manager operations demonstrating the lowest vulnerability to operational and investment management failure. Corporate Slide Deck | May 2013 3
Schroders A trusted heritage Source: Schroders, as at 31 March 2013 Corporate Slide Deck | May 2013 4
Total AUM by channel, region and product Assets under management £236.5 billion By channel By region By product 7% 7% 15% 20% 35% 46% 35% 58% 28% 9% 22% 18% UK Institutional Intermediary Equities Fixed Income Continental Europe* Private Banking Asia Pacific Alternatives Multi-asset Americas Private Banking * Including Middle East By client domicile Corporate Slide Deck | May 2013 5
Asset Management AUM by channel and product Institutional AUM £136.8bn Intermediary AUM £82.4bn 8% 11% 17% 24% 48% 53% 22% 17% Equities Fixed Income Multi-asset Alternatives Corporate Slide Deck | May 2013 6
Asset Management AUM by channel and region Institutional AUM £136.8bn Intermediary AUM £82.4bn 13% 18% 27% 35% 32% 29% 28% 18% UK Continental Europe Asia Pacific Americas By client domicile Corporate Slide Deck | May 2013 7
Group funds under management £bn £ billion 212.0 240 204.8 196.6 194.6 187.3 164.0 190 148.4 143.6 142.7 139.1 137.6 132.5 132.0 130.2 128.5 122.6 122.5 122.3 118.8 116.7 113.3 112.1 110.0 140 106.9 110.2 105.6 104.9 102.7 100.0 98.3 87.6 90.4 88.3 74.0 83.4 63.8 90 57.6 53.1 52.9 41.9 27.6 36.2 28.3 26.3 22.8 21.0 40 -10 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 June December £212.0 billion of funds under management as at 31 December 2012 Source: Schroders, as at 31 December 2012 Corporate Slide Deck | May 2013 8
Schroders’ history 1767 1800 - 1853 1900 - 1962 2000 - 2006 2007 - 2010 2012 1767 1800 1923 2000 2007 2012 Christian Matthias Christian Matthias J. Henry Banking Sale of investment Acquisition of Aareal Acquisition of 25% Schröder’ son, Schröder sets up a Corporation opens in banking business. Asset Management of Axis Asset firm of merchants in Johann Friedrich New York. GmbH. Agreement Management 2004 Hamburg. Schröder moves to with Fisch Asset Company, the Indian 1926 Schroders celebrates its London to set up a Management. asset management 200 th anniversary. An investment firm. Expansion to the business of Axis department is Middle East. Bank Ltd. 2005 1804 created in London. Schroders establishes a 2008 2012 Johann Heinrich 1960 joint venture fund Schröder joins his Acquisition of Swiss Acquisition of STW Schroders starts to management company brother’s firm and Re Asset Fixed Income acquire a presence in in China with the Bank Schroders is Management Funds Management, a US of Communication Co. each of the major and the Singapore- fixed income firm founded. Ltd. (BOCOM). financial markets in based private client 1818 the world. advisory unit of 2006 Johann Heinrich Commonwealth Bank 1962 Acquisition of Schröder sets up his of Australia. NewFinance Capital, a Acquisition of own merchant London-based manager Helbert, Wagg & Co., 2010 banking firm, J. of funds of hedge funds. a long-established Acquisition of 49% of Henry Schroders & London firm with a Co. the share capital of strong corporate RWC Partners Ltd. 1853 finance department. First bond issued, to finance a railway in Cuba. Corporate Slide Deck | May 2013 9
Q1 2013 Interim Management Statement Strong start to the year Profit before tax up 20% to £115.0m (Q1 2012: £95.5m) Asset Management profit before tax £105.2m (Q1 2012: £88.6m) Private Banking profit before tax £4.9m (Q1 2012: £6.4m) Net new business £5.6bn (Q1 2012: £1.6bn) Assets under management £236.5bn (31 December 2012: £212.0bn) STW acquisition completed 2 April 2013 Assets under management £7.3bn Corporate Slide Deck | May 2013 8
Outlook and priorities 2013 Confidence in long-term growth Outlook Expect some slowdown after strength of Q1 Leverage our competitive position – performance – product range – distribution strengths – global footprint Continued growth in Intermediary and Institutional Integration of Cazenove Capital Good long-term growth opportunities Corporate Slide Deck | May 2013 11
Investment Capability
Our philosophy drives our process Belief As an active manager we believe in the potential to generate competitive returns from independent fundamental research Capability Our equity and credit analysts evaluate companies from many perspectives, focusing on a business’ potential for long -term value creation and earnings power, and its ability to service debts Extensive research resources focused on: Long term: to exploit short-term volatility Bottom-up: macro-economic dynamics embedded in stock research Value creation: cash flow, balance sheet, return on equity – over earnings momentum These characteristics stem from our approach: Long term: low turnover, patient No style bias: emphasis on quality and potential earnings power Contrarian: in the use of market over-reaction Stock selection is key: stock contribution primary, sector secondary Corporate Slide Deck | May 2013 13
Equity investment approach Fundamental research and specialist teams Research Systematic Portfolio Client + Risk Control Analysis Analysis Construction Portfolio Fundamental Bespoke Undertaken by Sophisticated Consistent and proprietary systematic dedicated teams proprietary Risk repeatable research by screens, to for each Management investment approximately provide an investment tools processes 100 dedicated objective grading product equity research of stocks Identification of Superior analysts Taking into all sources of risk investment account client performance guidelines and objectives Constructing portfolios of our highest conviction ideas Corporate Slide Deck | May 2013 14
Investment issues – corporate governance Handled by a dedicated team Policy promotes accountability and prosperity by encouraging best practice Strategy and standards of companies constantly monitored No ‘tick - box’ mentality Schroders normally supports management but we have no hesitation in withdrawing support or opposing management if this is in the best interests of clients Corporate Governance decision-making integrated into overall investment process Corporate Slide Deck | May 2013 15
Investment issues – Socially Responsible Investment (SRI) Handled by a dedicated team established in 2000 SRI Policy SRI Policy applies to the Pan European market Invest in companies operating at an acceptable level of environmental and social awareness – without compromising the fiduciary responsibilities of trustees Engage with investee companies Screening Advise clients on the implementation of ethical screens Manage money for clients with some form of ethical constraint Shareholder Influence Engage with investee companies Encourage those where the environmental, social and ethical codes and performance fall short of acceptable criteria, and where this is likely to be detrimental to the long-term value of the company, to move towards the adoption of industry best practice The SRI team advises on all national and international shareholder resolutions of a SRI nature Corporate Slide Deck | May 2013 16
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