Companies and economies around the world continued to feel the effects of the coronavirus-enforced lockdowns during the second half of 2020. Investment Week reports on how they have done since then.
Man Group
Man Group saw its assets under management fall by 8% over the first half of 2020 as the market impact of coronavirus saw investment losses reach $5.4bn and investors withdrew a total of $1.2bn from the asset manager.
The firm's half-year results, published today (30 July), revealed total AUM had fallen from $117.7bn at the start of 2020 to $108.3bn as profits before tax collapsed by 20% to $94m.
Negative FX translation and other movements cost the group a further $2.8bn over the first half of the year.
While Man Group's absolute return strategies delivered positive performance in the first quarter, the rapid market rally in Q2 brought performance back into the red by 30 June. Similarly, total return strategies are down 1.5% at the half year mark, while systematic long-only strategies fell 5% and discretionary long-only strategies were down 11%.
However, the firm noted that its strategies outperformed peers on an asset weighted basis by 1.3%, while absolute return strategies, total return and multi manager solutions outperformed by 2%, 6.6% and 1.3% respectively.
"The fact that outperformance was concentrated in February and March was reassuring to our clients," Man Group said.
The impact of the first half of 2020 was to see adjusted earnings per share fall 37% to 5.4 cents, compared with 8.6 cents at the same time last year, which Man Group said was "primarily due to lower performance fee profits", as a result of performance losses, but this was "partially offset by higher management fee profits and lower share count following the share buyback programme announced in October 2019".
Man Group has proposed an interim dividend of 4.9 cents per share, up from 4.7 cents per share at the same time last year. The group's share price was down 22.1% year-to-date, prior to markets opening on Thursday.
CEO Luke Ellis said: "The first half of 2020 was a challenging time for everyone. Our foremost priorities were the health and wellbeing of our colleagues and the performance of our clients' assets - and I am proud of what we achieved on both counts.
"We switched seamlessly to working from home, continued to support our clients at every step and generated outperformance in extremely volatile markets. As anticipated, redemptions increased in Q2, but it is pleasing to see flow momentum normalising as we enter the second half.
"Since the onset of the pandemic, we have acted to position the business for long-term success and our strong balance sheet has allowed us to concentrate on our people and our clients. Investing in our talent and technology, combined with our deep relationships with clients, is what will drive our future growth as the recovery develops."
Schroders
Schroders' wealth and asset management divisions fared well in the market chaos of the first half of 2020 as the group's income for the period remained broadly flat on the same time last year at £1bn but profits before tax dipped by around 10% to £306m.
However, the group's retail mutual fund business suffered from the "risk-off environment" and "limited demand" amid net outflows of £4.8bn, compounding £1.8bn of redemptions at the same time last year. As a result, mutual fund AUM fell from £102bn at the start of the year to £94bn.
Across the wider asset management business the group saw AUM rise 5% to £526bn following £38.1bn of net inflows, but net income before exceptional items fell 3% to £836bn.
Private assets and alternatives AUM rose to £45.3bn from £44.2 at the start of the year, despite net outflows of £400m, amid "ongoing client demand for … strategies, such as real estate, private equity and infrastructure", the firm said.
The £175bn AUM solutions strategies business saw net new business of £42.7bn for the half year, largely as a result of the onboarding of the remainder of the Scottish Widows mandate of £29.5bn.
Schroders' wealth management business saw net income rise 30% to £188m, up from £144m at the same time last year, including performance fees of £500m, up from £100m. Profit before tax and exceptional items rose 40% to £60m and profit before tax increased 37% to £41m.
Net new business within wealth management reached £1.3bn in the first half of the year, with £800m attributed to Cazenove Capital clients and £400m through Benchmark Capital. Schroders Personal Wealth saw net inflows of £100m, but this figure was "impacted by Covid-related branch closures".
Total assets within Schroders' wealth management division dipped slightly overall to £65.7bn, down from £66.7bn at the start of the year.
Basic earnings per share in the group have fallen from 92.4p at the end of H1 2019 to 78.7p, but the dividend per share has remained flat at 35p.
Group CEO Peter Harrison said: "We have delivered a robust performance in the first half of 2020, despite the extraordinary period of market volatility and continuing social and economic uncertainty.
"Throughout this challenging period, our primary focus has been on our clients and I am proud of how our people have responded. Through their efforts, and aided by the investments we have made in technology, our diversified business model has continued to perform well, enabling us to generate £38.1 billion of positive net new business.
"We saw client demand for Solutions strategies as well as momentum across Wealth Management. Assets under management grew by 5% to £525.8 billion.
"We have declared an unchanged interim dividend and continue to maintain a strong capital position, allowing us to invest in the future growth of the business. We are mindful of short-term risks, but believe that we will continue to generate value over the long term for our clients and our shareholders."
