Strategy
Our objectives
are aligned with
those of our
clients and
shareholders –
to create
sustainable
value over the
long term.
We deliver
long-term
value by:
Delivering consistent
and above-average
performance
Building close
relationships
with clients
Measurable
by:
Targeting at least 60 per cent.
of assets under management to
outperform benchmark or peer
group over rolling three-year periods.
Levels of gross sales; and levels
of net new business.
Benefits:
Superior investment performance*
creates value for our clients and is
a driver of growth in new business.
eveloping the investment products
D
and solutions which meet our clients’
needs will lead to increased new
business opportunities and greater
longevity of client relationships.
Risks:
Performance can fall short of targets.
Products that do not meet
their objectives can put client
relationships at risk.
Results:
72%
The percentage of assets under
management that outperformed
over three years to 31 December*
84.1bn
13.0bn
£
£
Gross sales
Net new business
(2014: £92.0bn)
(2014: £24.8bn)
(see 2, page 12)
(2014: 78%) (see 1, page 12)
Our
Markets were challenging in 2015
expectations with macro factors driving volatility,
for 2016:
particularly in the second half of
the year.
Over the 12 months to 31 December
2015, 53 per cent. of assets (2014:
59 per cent.) outperformed
benchmark or peer group. This may
impact our performance statistics for
the three years to 31 December 2016.
* See Glossary.
10
Schroders | Annual Report and Accounts 2015
In 2016, net new business may
be impacted by market conditions.
Volatility can weigh upon sentiment,
particularly in the Intermediary channel.
However, with a broad product
set and highly diversified global
business, we expect to continue
to grow our business in a more
challenging environment.
Strategic report Strategy & Business review
Ensuring operational
efficiency
Retaining and
developing a deep
pool of talent
Investing in future
growth opportunities
argeting a cost:net revenue ratio
T
of 65 per cent. and a compensation
cost:net revenue ratio of between
45 and 49 per cent. depending on
market conditions.
Developing our employees and
retaining talent.
Investment in both organic growth and
acquisition opportunities; and seed capital
deployed to support the development of
new investment strategies.
We will generate high levels of profit
after tax enabling increased dividends
and continued organic investment in
our business.
Retaining and developing talent is
key to organisational stability and long
term success.
Building shareholder value over the
long term.
In weaker markets, the ratios may be
higher than our long-term target.
Talented people are frequently
targeted by competitors seeking
to build their business.
In the short term, particularly during
periods of market weakness, profitability
can be adversely affected.
63%
94%
£
£
Investment capital
Seed capital
investments
Cost:net
revenue ratio
(2014: 64%)
(see 5, page 13)
44%
Compensation
cost:net
revenue ratio
(2014: 44%)
(see 6, page 13)
Employee
retention
(highly rated)
(2014: 94%)
93%
Employees who
are proud to be
associated with
Schroders
(Employee Opinion
Survey)
942m
(2014: £725m)
229m
(2014: £163m)
(2014: n/a)
We are budgeting a 45 per cent.
compensation to net revenue ratio
in 2016.
Retention rates have been high in
recent years but could be affected
if competitors recruit more actively.
Capital deployed in seeding new
investment strategies increased
to £229 million in 2015.
Weak markets could lead to short term
losses on investment capital, although
we are well positioned for the long term.
Schroders | Annual Report and Accounts 2015
11