Schroders paid almost £86m for the 65% stake it holds in advice support firm Benchmark Capital, the group's full-year results for 2016 have revealed.
The results revealed the group had attracted £1.1bn in net inflows over 2016, with continued demand from institutional clients offsetting outflows from intermediary and wealth management clients.
Schroders blamed "macro uncertainty and volatile markets" for the drop in intermediary sales during the year, with total outflows from this channel standing at £2.9bn - mainly from equity products.
The results confirmed advice firm Benchmark Capital is now included as a separate division within Schroders Wealth Management, increasing assets under management and administration under management by £3.4bn and £11.1bn respectively.
The group announced its investment in Benchmark Capital in November last year but did not disclose how big its stake was or what was paid. The results revealed it to be a 65% share, purchased for almost £86m.
On the wealth management side, Schroders said, flows were affected by clients' preference for private assets and UK property after seeing limited market returns in previous years. This area saw net outflows of £300m.
During the fourth quarter, the group suffered outflows from both institutional and intermediary clients, with the former withdrawing £1.1bn during the three months despite three quarters of inflows, while the latter took out £700m.
Schroders also saw intermediary outflows during the first half of 2016 due to negative Brexit sentiment, which contributed to overall negative flows into this channel.
However, strong performance and weak sterling pushed total assets under management up by 27% to £397bn, from £313bn at the end of 2015. Some £42bn of this has been attributed to the weaker currency, while £6.7bn was added through acquisitions.
Meanwhile, profits continued to grow, with profit before tax and exceptional items up 6% to £644.7m compared to £609m at the end of 2015. Pre-tax profit was £610m, up from £589m at the end of 2015. In the asset management division specifically, pre-tax profit was up from £528m at the end of 2015 to £553m.
Looking ahead, Schroders said it was "mindful of industry headwinds" going forward which were likely to weigh on intermediary sales and create flows volatility.
Schroders group chief executive Peter Harrison (pictured) said: "We delivered good results in 2016, with profit before tax and exceptional items increasing 6% to £644.7m. Strong investment performance, positive net inflows and strategic acquisitions led to assets under management and administration increasing 27% to £397bn."
He added: "We have made good progress against our strategic objectives and see a number of future growth opportunities. Our diversified business model, a strong financial position and willingness to invest behind the business means we are well placed to take advantage of these opportunities, despite the challenges faced by the industry."
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