Investor Seminar 2009
Michael Dobson
Chief Executive
29 June 2009
Agenda
Speaker
1
Introduction & welcome
Michael Dobson
Distribution Priorities
Massimo Tosato
Product Focus
– Multi-asset
– Fixed Income
– UK equities
– European Equities
– Emerging market equities
– QEP
John McLaughlin
Karl Dasher
Richard Buxton
Gary Clarke
Allan Conway
Justin Abercrombie
Private Banking
Philip Mallinckrodt
Conclusions
Michael Dobson
2
Investor Seminar 2009
Distribution – the way forward
Massimo Tosato
Vice Chairman
29 June 2009
Institutional
Restore growth
Broad product capability
Equities, Bonds, Alternatives, Multi-asset
Strategy
– Central manufacturing, local delivery
Product development
Product specialist sales resources
– Focus on growth channels
Consultant relationship team
– Increase gross sales
UK
Europe
Asia
Americas
– Increase longevity
Channel Sales specialists, client servicing
Marketing & communications
Charities
4
DB Pension
schemes
Insurance
companies
Official
Institutions
DC Pension
schemes
– Develop strategic relationships
– Growth strategy built around product
innovation
5
Intermediary
Building leadership with new positioning
Broad product capability
Equities, Bonds, Alternatives, Multi-asset
– Component provider
Product development
Product specialist sales resources
UK
Europe
Asia
Strategy
– Solutions provider
Americas
– Branded or sub-advised
Channel Sales specialists
Client servicing, marketing
Discretionary
End client
6
Wholesaler
Platforms
Bank
branches
– Getting closer to the client
Tied
Agents
Independent
Advisers
– Individual retirement accounts
7
Strategic repositioning
Providing solutions
Client
Diversified
Institutional DC, Small DB
Intermediary
Absolute Return
Intermediary
Institutional
Income
DGF
Pension Plus
Drawdown
Multi-manager fund ranges
Fixed Income Specialist – Emerging Market Debt Absolute
Return, Asian Bond, Emerging Europe Debt Absolute Return
Alternatives / other – NFC / funds of hedge funds
Income Maximiser Funds – UK, European, Global
Fixed Income Yield
Protected Products
Intermediary
Institutional
Defensive Range
Bespoke structures
Liability Matching
8
Alternatives
Fund
Post Retirement
Equity Yield Funds – UK, Asian, European, Global
Intermediary
Inst – DB
Pre Retirement
- Large
- Medium/Small
LDI – Bespoke
LDI – Unitised
9
Tactics: managing Intermediary
Anticipating client demand
Schroder Products
GOVERNMENT
DEBT
CORPORATE CREDIT
HYBRID
EQUITY
Equity
European, UK, US, Asian, Emerging
Markets, Thematic Global
Advisory
Discretionary/
Wholesale
Yield / Dividend
Structured or
Protected Equity
European Defensive, Step Invest,
CPPI?
Global Convertible, Asian
Convertible
Convertibles
credit
Corporate Bond
Short-term Govt
Bond
Liquidity
RISK APPETITE
RETURNS
Multi strategy
Dynamic multi-asset
Dec 08
10
European Yield and Dividend Max
Global Yield and Dividend Max
2011/2012
EMD Absolute Return,
Strategic Bond, Global High Yield
Euro Bond, Euro Corporate Bond,
Global Bond, Euro Short Term
Bond, European Bond,
Global Inflation Linked
Euro Government Bond,
Euro Government Liquidity
Euro Liquidity, US Dollar Liquidity
11
Conclusions
– Demographic development driving secular changes
– Changing demand pattern driving our distribution strategy
Product
Channel
Geography
– Demand overview
12
2009 YTD
H2 2009
Schroders is
well placed
to take
advantage of
these trends
13
Investor Seminar 2009
Multi-Asset
John McLaughlin
Multi Asset and Structured Solutions
29 June 2009
Multi-Asset
Assets Under Management May 2009 - £18.5 billion
By channel
By strategy 11%
5%
21%
6%
4%
6%
1%
39%
9%
2%
35%
Convential balanced
Liability hedges
Structured products
15
61%
Diversified balanced
Multi-manager
Intermediary UK
Intermediary Asia
Institutional UK
Institutional Asia
Intermediary Europe
Intermediary Americas
Institutional Europe
16
AUM history £bn
New Balanced
Traditional Balanced
25
10.0
20
8.0
15
6.0
10
4.0
5
2.0
0
2004
2009
Multi Manager
2.0
0.0
2004
Structured Investments
3.0
Total
2.5
1.5
2.0
Open
1.5
1.0
1.0
0.5
0.0
17
2009
Closed
0.5
2004
2009
0.0
2004
2009
18
Performance
130
118
120
114
110
110
100
90
80
70
60
May 2006
106
Life Diversified Growth Fund
GAA Strategy
102
Equity Composite
May 2009
40
3 mnt UK LIBOR
98
Jan 2008
May 2009
140
30
120
20
10
100
0
-10
-20
Schroder Multi-Manager Cautious Managed
IMA Sector Average
-30
Mar 2005
80
60
May 2009
Nov 2005
Sources: Schroders, Lipper Hindsight, Thomson Datastream, FTSE; from fund inception until 31 May 2009
19
Income Maximiser
FTSE100
May 2009
20
Our process
What makes Schroders Multi Asset proposition different?
– True breadth – diversification by asset class, by asset manager, by investment vehicle
– High conviction asset allocation decisions
– State of the art risk analysis and portfolio construction
– All the tools in one box
– LDI in a multi-asset framework
UK Equity 12%
Japanese Equity 2%
Pacific Equity 8%
Global Equity 5%
Private Equity 2%
Infrastructure 2%
High Yield Debt 10%
Convertible Bonds 4%
Cash 7%
21
Source: Schroders as at 30 April 2009
*Private Equity includes allocation to Schroder PEFOF III and IV plus three external managers
European Equity 0%
US Equity 6%
Emerging Market Equity 4%
Property 2%
Absolute Return 6%
Emerging Market Debt 9%
Inv. Grade Bonds 17%
Commodities 4%
22
Conclusions
We aim to lead in financial solutions
– Our new approach to asset allocation has survived the ultimate stress test
– Diversification opportunities have returned in 2009
– Investment performance is ahead of target in all major products YTD
– The business environment is perfect for the purveyor of diversification with risk control
– Asset allocation and financial engineering is proving to be a powerful combination
– Making progress with a major strategic initiative – retirement solutions for the individual
23
24
Investor Seminar 2009
Schroders Global Fixed Income
Karl Dasher
Global Head of Fixed Income
29 June 2009
Fixed Income
Assets under Management May 2009 £15bn excluding Multi-Asset
£19bn including Multi-Asset
Schroders Fixed Income By Region
22%
28%
18%
32%
UK
26
Source: Schroders, May 2009
Euro
Americas
Asia Pacific
27
How we approach the Fixed Income opportunity
–
Schroders Fixed Income investment process seeks to incorporate
The breadth of a global fundamental research capability
The discipline of systematic processes to enhance risk control
28
The investment in developing quantitative capabilities has proven prescient
The agility and judgment of experienced portfolio managers
–
Credit research was a critical differentiator for Schroders Fixed Income in 2008
Accountability for performance and risk management is clear
We believe an adaptive process is best suited to capitalize on cyclical opportunities and
structural rigidities
29
Global/Local Capability
London
NYC/PHL
–
–
–
–
Rates
Credit
ABS
Munis
–
–
–
–
Rates
Credit
ABS
Quant
Tokyo
– Rates
– Credit
Singapore
– Rates
– Credit
Sydney
– Rates
– Credit
30
31
The Results are Validating our Approach
Rankings and Awards
3 mths
1 year
3 years
5 years
Schroder All Maturities Corporate Bond Fund*
1
1
1
1
Schroder Sterling Broad Market Bond Fund*
1
1
2
1
Schroder Long Dated Corporate Bond Fund*
1
2
2
1
Schroder Sterling Bond Fund*
1
3
3
3
Schroder Long Dated Sterling Bond Fund*
1
4
4
4
Schroder Index Linked Bond Fund*
1
3
2
2
Schroder ISF Euro Corporate Bond*
1
1
1
1
Schroder ISF Euro Bond Fund*
1
1
2
2
Schoder Global Corporate Bond Fund*
1
1
1
1
Schroder ISF Euro Corporate Bond**
1
1
1
1
Schoder ISF Euro Bond**
2
2
3
2
Schroder ISF Euro Short Term Bond**
1
1
1
1
Schroder ISF European Bond**
2
1
1
1
Schroder ISF Global Corporate Bond**
1
1
2
2
Schroder ISF Euro Liquidity**
1
2
2
2
Schroder Offshore Cash Fund***
1
1
1
1
Schroder ISF USD Bond**
2
2
2
2
Schroder ISF Strategic Bond**
1
2
3
-
Schroder ISF Global Bond**
2
2
2
1
Schroder ISF Global Inflation Linked**
1
4
2
2
Schroder ISF Asian Bond**
4
3
1
1
Schroder ISF Global High Yield**
1
1
2
-
32
Best larger Fixed-Interest
House 2009
* Source: Mercer MPA peer group analysis as at 31
December 2008
** Source: Morningstar as at 31 March 2009
*** Source Morningstar IMA Money Market GBP as at 31st
March 2009
33
Investment success is translating to business success
Assets under Management May 2009
SISF Euro Corporate Bond (€m)
SISF Global Corporate Bond (US$m)
450
400
350
300
250
200
150
100
50
0
2500
2000
1500
1000
500
0
2002 2003 2004 2005 2006 2007 2008 2009
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
SISF Global High Yield (US$m)
1200
1000
800
600
400
200
0
2005
34
Source: Schroders May 2009
2006
2007
2008
2009
35
Conclusions
–
–
Schroders Fixed Income investment process is well suited for current markets
Global research and execution platform
Deep and tested commitment to fundamental credit research
Continued investment in technology and quantitative processes
Schroders is poised to continue to grow market share in this important asset class
Solid performance in major product categories
36
Significant effort to expand institutional business
Talking to clients about more than credit in anticipation of rotation
Increasing participation in solutions-oriented mandates
Intense marketing focus in every major market
37
Investor Seminar 2009
Richard Buxton
Head of UK Equities
29 June 2009
UK equities
A long history
– Industry trends have seen a structural move from:
balanced to specialist mandates
core, low risk to higher alpha, index-unaware product
UK/regional to global mandates
– People, structure, products, leadership & culture have needed to change
– Repositioned product, clarified offerings, embedded analysts in UK & European teams
39
40
Funds Under Management
UK Equities total Assets Under Management £14bn
24%
27%
44%
56%
23%
26%
Prime £3.8bn
Specialist £3.7bn
Institutional £6.2bn
Value £3.2bn
Small & Mid Cap £3.3bn
Intermediary £7.8bn
Source: Schroders, as at 31 May 2009
41
42
What makes the Schroders UK Equity Team
different?
– A large resource
19 experienced, inquisitive, performance-driven individuals
Breadth of experience and diversity of views
– Strong grounding in fundamental research
balance sheet, cash flow & profit/loss statements
business modelling through scenario analysis
– Long term investment horizon, beyond short-term news flow
– As long-term shareholders, actively engage on key corporate governance issues
43
44
Performance
UK Pooled Funds
YTD
Quartile*
1
+20.20%
1
-21.90%
+13.52%
2
+8.21%
1
1
+15.47%
1
+8.11%
+31.63%
1
+25.99%
1
+18.31%
2
+7.97%
3
6 months Quartile*
3 months
Quartile*
UK Alpha Plus Fund
+34.77%
1
+23.99%
UK Equity Fund
+21.90%
1
Income Fund
+23.38%
Recovery Fund
FTSE All Share Index
3 years
Quartile*
5 years
Quartile*
1
-9.12%
1
+36.98%
1
-26.88%
3
-13.92%**
2
+17.37%**
2
1
-11.28%
1
-4.63%
1
+31.34%
1
+18.07%
1
-8.61%
1
-5.00%**
1
+30.61%**
1
+4.15%
3
-23.66%
2
-13.74%
2
+21.94%
1
Source : Schroders, unaudited figures to 31 May 2009
*IMA UK All Companies Sector except Income Fund which is shown against the IMA UK Equity Income Sector
**Manager change in June 2006
45
12 months Quartile*
46
UK Equities
Future opportunities
– Market share gains in pension funds
– Further growth in intermediary channels
Traditional channels
Financial institutions / outsourcing
– Innovation
UK Mid 250 Fund
UK Alpha Plus Fund
Income Maximiser Fund
– Support global products
47
48
Investor Seminar 2009
Gary Clarke
Head of European Equities
29 June 2009
European Equities (including small cap)
Assets Under Management 29 May 2009 - £5.5 billion
5%
14%
18%
6%
37%
6%
63%
51%
50
Core
Value
Yield
Unconstrained
Small Cap
Growth
Institutional
Intermediary
51
Intermediary channel: Industry movements / Market share
Industry European equity assets have collapsed…
Schroder market share has declined since 2006…
€bn
250
6%
200
4%
150
100
2%
50
0
0%
2001
2002
2003
2004
2005
2006
2007
2008 YTD to
April
2009
2001
2002
2003
2004
2005
2006
2007
2008 YTD to
April
2009
We are now positioned for growth in market share and we will benefit from increased allocation to
European equities
*Source: Schroders, Lipper FERI. Universe is Equity; Europe, Equity Eurozone, Luxembourg domiciled and IMA Europe ex UK.
52
53
European equities - Product performance
Peer group ranking
Assets in quartile (%)
YTD to 29/05/2009
Number of funds in quartile (%)
50%
45%
35%
2008
3 Years to
29/05/2009
29%
0%
20%
2%
3%
49%
30%
40%
11% 5%
22%
60%
19%
80%
100%
Our largest funds now display strong performance
1st Quartile
54
2nd Quartile
YTD to
29/05/2009
31%
2008
24%
3 Years to
29/05/2009
25%
0%
20%
38%
8%
46%
17%
15%
8%
40%
23%
15%
50%
60%
80%
100%
Our whole range is positioned for growth
3rd Quartile
*Source: Micropal. Universe is Equity; Europe, Equity Eurozone, Luxembourg domiciled and IMA Europe ex UK. Rankings on 13 Schroders
funds, A class shares.
4th Quartile
55
Our process
What makes Schroders’ European Equities different?
Specialist/Intermediary
–
Our strength is our focus on higher performance, higher margin Alpha/Specialist
long only products. These funds are a key requirement of fund selectors today
–
We maintain an excellent reputation in this space
Core/Institutional
–
We have rebuilt our core institutional analyst driven process
– Our core institutional offering is now process driven and highly scalable. This is
something we have failed to deliver in the recent past
56
57
Conclusions
– Allocation to European equities is at an historic low
– European equities are a core asset class for our European client base
– Broad and clearly defined product range with competitive performance
– For the first time, a core product which is scalable in the Institutional channel
58
59
Investor Seminar 2009
Head of Global Emerging Equities
Allan Conway
Head of Global Emerging Equities
29 June 2009
Emerging markets
AUM May 2009 - £9.8bn
By Products
By Client Type
5.8%
26.2%
26%
49.5%
18.5%
GEMS
LATAM
BRICs
Others
74%
Intermediary
Others (GEMO 3%, EM Europe 1.3%, Middle East 1.3%, GEM Commodities 0.2%)
Growth focus now on Institutional GEMS
Source: Schroders, as at 31 May 2009
61
Institutional
62
Fund movements/net new business
£ million
16,000
14,347
GEMs Institutional Wins 2008-2009
14,000
12,000
9,752
10,000
No of Clients
£m
Americas
7
309
Europe
3
27
Australasia
4
329
Total
14
665
8,000
7,401
6,000
3,179
4,000
2,000
4,822
– Strong pipeline
1,967
0
2004
2005
2006
2007
2008
2009
Total FUM
£m
12/07
NNB
FX/Market Moves
12/08
05/09
14,347
(1,220)
(5,726)
7,401
9,752
Source: Schroders. 2009 data to 31 May.
63
64
Capacity management
Current FUM (GBP bn) End Capacity Estimates (GBP
May 2009
bn)
Global Emerging Markets
Latin America
BRIC
2.6
1.8
4.9
6.5
3.0
6.0
3.9
1.2
1.1
Global Emerging Market Opportunities
0.3
1.0
0.7
Eastern Europe
Middle East
Commodities
Total Funds
0.1
0.1
0.0*
9.8
1.0
1.0
0.5
19.0
0.9
0.9
0.5
9.2
Active capacity management:
– Soft closed BRIC (07/2007) and Latin (07/2007) but re-opened Q4 2008
Source: Schroders.
* New funds. May 09 FUM of £31.5mn
65
Available Capacity (GBP
bn)
66
Our process
What makes Schroders’ Emerging Markets Equities different?
– Investment process
Highly disciplined/systematic process developed over 20 years
Alpha generated through country and stock selection, using quantitative and fundamental
techniques
Strong team culture - the antithesis of a personality led approach
Pro-active risk management
- risk budgeting
- alpha adjusted tracking error
– Resources
- use of stop loss
Team of 32 investment professionals with 13 years average experience
All Fund Managers (except 1) based in London
Analysts based in regions including Asia, Latin America and Middle East (12:1 stock/analyst
ratio for core coverage)
– Innovation
New products - BRICs, Middle East, GEMs Opportunity (Frontier fund expected within a year)
One of first International Asset Managers to set up a dedicated investment team in the Middle
East (July 2008)
67
68
Emerging Markets performance
Rankings and Awards
Performance vs Benchmark*
Awards
To March 09
Annualised
1yr
2yrs
3yrs
4yrs
5yrs
GEMS
+2.3
+2.7
+2.9
+2.3
+0.9
BRICs
+2.5
+1.9
+2.8
-
-
Latam¹
-2.0
-6.1
-3.3
-1.7
-0.8
E. Europe
+4.4
+2.8
+1.6
+2.0
+1.1
SISF BRIC
- Lipper Fund Award 2009:
Best fund over 3 years in Austria, Europe, France, Germany,
Gulf, Netherlands, Nordics, Spain, Switzerland, Hong Kong and
Singapore
SISF Latin
America
- Lipper Fund Award 2009:
Best fund over 5 years in Singapore
Schroder
GEM UK UT
- Morningstar Fund Award 2008 in Singapore
SISF EM
- Standard & Poor’s Fund Awards 2008 winner in Australia
- Milano Finanza Global Awards 2009: rated AAA
Quartile Ranking**
1yr
2yrs
3yrs
4yrs
5yrs
GEMS
1
1
1
1
2
BRICs
1
1
1
-
-
Latam
3
3
2
2
2
E. Europe
1
1
2
1
3
Ratings - May 09
Source :
*Performance: Schroders. Performance figures presented are for the SISF fund range I-Acc shares (USD) and Erisa for GEMs.
For SISF funds the fund and benchmark have different pricing points (intra-day versus closing price respectively) so there may be a performance timing effect at month-end. Due to recent
market volatility, this timing effect may be larger than usual.
**Quartile ranking: Micropal Workstation except GEMs (Erisa) which is from Callan. Calculation settings: Based on A Acc share class, Lump, % chg, Init $100.00, Off-Off, USD Unadj. Inc.
For Latam, no 5/10/40 universe available, full Micropal universe used instead. For E. Europe custom 10/40 universe used.
¹ SISF Latin performance to month end and the benchmark to month end -1Day.
69
70
Performance
Schroder Global Emerging Market ERISA Fund
Investment mandate:
Benchmark:
Inception Date:
Emerging Markets
MSCI EM Index Net (TR)
31 December 1991
New Process¹
Performance (Gross returns in US$) to 31 March 2009
Q1 09 2008 2007 2006 2005
2004 2003 2002 2001 2000 1999 1998 1997 1996
ERISA*
+0.1
-50.7
+42.6 +35.0
+34.0
+18.4 +57.3
-8.6
-7.6
-34.1 +72.2 -23.0
-3.4
+16.0
MSCI EM Net (TR)**
+1.0
-53.3
+39.4 +32.2
+34.0
+25.6 +55.8
-6.2
-2.6
-30.8 +66.4 -24.3
-0.2
+2.5
Relative
-0.9
+2.6
+3.2
+2.8
0.0
-7.2
+1.5
-2.4
-5.0
-3.3
+5.8
+1.3
-3.2
+13.5
Tracking Error
n/a
3.5
2.4
2.1
1.6
3.2
2.7
3.1
3.6
4.7
5.3
5.9
2.3
3.6
Information Ratio²
n/a
1.29
1.08
1.08
-0.12
-1.75
0.41
-0.76
-1.31
-0.86
0.74
0.01
-1.44
3.68
New Process¹
1 Year
2 Years
3 Years
4 Years
5 Years
10 Years
Annualized
since Inception
ERISA*
-44.8
-17.2
-5.3
+5.7
+6.8
+7.5
+7.9
MSCI EM Net (TR)**
-47.1
-19.9
-8.2
+3.4
+5.9
+7.9
+6.6
Relative
+2.3
+2.7
+2.9
+2.3
+0.9
-0.4
+1.3
Tracking Error
4.5
3.5
3.0
2.8
3.0
3.4
4.5
Information Ratio²
0.76
0.84
0.94
0.75
0.24
-0.06
0.25
Annualised to 31 March 2009
* Gross of Fees.
** Prior to 1 June 2000 the benchmark was the MSCI EMF ex Malaysia (Gross div-reinvested). Performance is compared to this benchmark chainlinked with the MSCI EM Net Index (TR).
Source: Schroders, MSCI.
¹New Process / team structure from November 2004.
²Based on geometric average of the excess return divided by the Tracking Error.
Past performance is not a guide to future performance. Please refer to important information regarding fees at the end of this presentation.
71
72
Quarterly performance since new process
Quarterly Excess returns of the Schroder Emerging Markets ERISA fund against
the MSCI Emerging Markets Net (TR) Index
3.5%
3.0%
2.66%
2.26%
2.5%
1.92%
2.0%
1.41%
1.5%
0.90%
1.0%
0.5%
0.01%
0.28%
0.37%
0.18%
0.05%
0.44%
0.13%
0.11%
0.0%
-0.07%
-0.5%
-1.0%
-0.53%
-0.63%
-0.90%
-1.5%
Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09
Excess Returns
13 out of the last 17 quarters have been positive
73
Source: Schroders. Quarterly Excess returns of the Schroder Emerging Markets ERISA fund against the MSCI Emerging
Markets Net (TR) Index
Past performance is not a guide to future performance. Please refer to important information regarding fees at the end of this
presentation.
74
Conclusions
– One of largest and best resourced EM Equities team in the world
– An extremely disciplined, systematic process rigorously implemented, with strong
emphasis on risk control
– Delivery of consistent outperformance against benchmark and peers resulting in
extremely competitive returns and even stronger risk adjusted returns
– Diversified product range and client base. Strong, innovative approach to product
development
– FUM at £9.8bn, represents 9% of firm wide FUM and more in terms of revenue
75
76
Investor Seminar 2009
Quantitative Equity Products
Justin Abercrombie
Head of Quantitative Equity Products
29 June 2009
Visit the QEP website @ www.schroders.com/qep
Quantitative Equity Products
Investment Philosophy
– Best of ‘man and machine’ (innovation not extrapolation)
– Emphasis on portfolio construction and genuine diversification of risk
– Value and Quality based (markets over last 2 years have been ‘relatively’ normal)
78
79
QEP Assets
Total Assets of £4.5billion
Region
Strategy
Continental
Europe
Global
Quality
Global Value
Channel
Asia ex
Japan
UK
10%
11%
Instutitional
Assets
Intermediary
Assets
4%
5%
15%
Japan
3%
Americas
2%
Global
Blend
53%
45%
27%
96%
15%
Australia
Global Core
3% 11%
Japan Core
US Core
– 86% Global Equities
– 71% Unconstrained
Source: Schroders as of 24 June 2009.
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– 80% UK & Australia
– 96% Institutional
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QEP Net New Business in 2009
Funded wins of £850mn
Net New Business YTD of £850mn
– Accelerated growth, predominantly
in global unconstrained strategies
Value, £42mn
Quality, £110mn
– Competitors usually ‘traditional’ fund
managers
Blend, £674mn
– Significant pipeline in unfunded wins
– £1.2bn NNB in 2008
– Strong consultant support globally
Core, £24mn
Source: Schroders as of 24 June 2009. 2009 YTD figure of represents £850mn of new funded assets to QEP.
Asset growth figures are subject to change due to foreign exchange rate and equity market fluctuations.
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Quantitative Equity Products
Relative Returns
25%
Relative Return – Annualised
20%
16.1%
Relative Return – Total
9.9%
9.6%
10%
5%
14.9%
13.4%
15%
6.6%
3.8%
1.1%
0.6%
0.9%
2.2%
3.0%
6.6%
5.0%
4.3%
0%
Track
Record
(years)
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Global Core
US Core
Japan Core
9,3
8,6
3,0
Global Value
4,6
EAFE Value
Global Quality
Global Blend
(Value, Quality)
Global Value
Extension
2,8
1,7
1,6
0,9
Source: Schroders, as at May 2009, GBP. (Global Blend is 50:50) Total assets of £4.7bn is calculated by QEP team. Relative returns are
arithmetically calculated, gross of fees in GBP with the exception of Global Value extension which is quoted in USD. QEP Composites have been
used for performance from the Schroders Performance Team. Global Dynamic Extension & Japan Core use NAV for I shares or equivalent.
Global Blend is a 5050 combination of Global Value and Quality composites.
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Quantitative Equity Products
Business strategy
– US market is the next marketing opportunity
– Leverage Schroders global intermediary capabilities
– Recruiting to meet growing demand
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Quantitative Equity Products
Comprehensive investment solutions
– Fundamentally based Value and Quality strategies
Enhanced Index
(2000)
Core: Global, US, Japan
– High conviction “bottom-up” region and sector allocation
Index Unconstrained
(2004 & 2007)
Global Value
Global Quality
Global Blend
– Dynamic Blend option based upon relative opportunity
– Up to 150% long Value, 50% short low Quality
Including Short-selling
(2008)
– Non market cap stock weights
– Strategic allocation to match client time horizons
Blending Strategies
(2007)
– Repeatable outperformance with low index relative risk
Global Value Extension
– Management of collateral exposures (e.g. currency, beta)
A comprehensive investment solution across
market environments and client time horizons
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89
Investor Seminar 2009
Private Banking
Philip Mallinckrodt
Group Head of Private Banking
29 June 2009
Private Banking
Overview
− A private banking business in UK, Guernsey, Switzerland. Singapore (1.1.10)
− Private client advisory in Italy
− Range of private banking services:
Deposit-taking
Custody of assets
Execution of payment, securities and foreign exchange orders
Active advisory on investments/funds
Discretionary asset management
Loans/credits
− Supported by a single Private Banking Service Centre in Zurich, since 1.4.2007
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Service Proposition
Medium sized business culture
− £11.4 billion of client assets
− 320 people
− Client focused
− Speedy, responsive, and confidential
− Investment philosophy focused on the whole portfolio
− Access to traditional and alternative investment products
− Responsive access to credit up to £20m per client
− First-class execution, administration and reporting, based on good IT
More personalised service than the large private banks but a considerably broader service than
private client investment management boutiques
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Investment service
Concentration on total portfolio
− Multi-asset investing
− Integrate cash-flow and tax realities
− Emphasis on asset allocation and risk management
− Leverage Schroders investment knowledge
Multi-asset expertise
Knowledge of underlying assets
– Complement with skilled external managers
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Client profile
Diversified client base
– Broad range of clients by size and type
– New business growth strongest in £5 - £25 million segments
– Diversified international client base
– UK: moving upmarket
Winner of UHNW (+£10m) – Overall Service Award
Winner of HNW - Image & Reputation Award
– Switzerland: domestic and international clients
– Singapore: mainly Asian clients and European expatriates
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Balance Sheet management
A private bank, not a secondary lender
– Shareholders’ equity of circa £257 million
– Customer deposits of £2.1 billion
– Total assets of £2.74 billion
– Assets: Government securities, interbank loans, customer loans and advances
– Tier 1 ratios of 15%-17%
– Strong focus on liquidity
– Short term, collateralized lending policy
– High quality and transparent collateral
– Limited residential and commercial mortgages
Source: Schroders as at 31 March 2009
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Growth priorities
Leverage common platform
− Focus on organic growth in net new assets
− Continued focus on £5-25 million market
− Recruitment of new relationship managers
− Singapore bank status from 1.1.2010
− In-fill acquisitions
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Investor Seminar 2009
Conclusions
Michael Dobson
Chief Executive
Forward-Looking Statements
These presentation slides contain certain forward-looking statements and
forecasts with respect to the financial condition, results of operations and
businesses of Schroders plc.
Such statements and forecasts involve risk and uncertainty because they relate to
events and depend upon circumstances in the future.
There are a number of factors that could cause actual results or developments to
differ materially from those expressed or implied by those forward-looking
statements and forecasts.
The forward-looking statements and forecasts are based on the Directors’ view
and information known to them at the date of this presentation. The Directors do
not make any undertaking to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. Nothing in this
presentation should be construed as a profit forecast
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