Money managers under the microscope
Je ne regrette rien
Schroders today reported exceptional losses of 167 million pounds — this was largely due to 147 million of writedowns on its own investments in hedge funds, private equity, fixed income and seed capital.
Analysts at UBS noted that these four areas had total investments of 585 million pounds at September 30, meaning the group had taken a 25 percent writedown.
Chief Executive Michael Dobson today confirmed that the writedowns included the group’s investment in private equity firm SVG.
Nevertheless, he insisted Schroders would keep its stake in SVG, and said it had in fact subscribed to SVG’s recent rights issue.
Last month Citi analysts said they expected the value of Schroders’ stake in SVG to have shrunk to 7 million pounds from 47 million pounds.
Meanwhile, Dobson remained bullish on acquisitions even though the firm failed to acquire Credit Suisse’s UK fund business or New Star which it had bid for, according to reports.
“Clearly we have lost nothing by being very disciplined on price in terms of acquisitions. It’s going to tough 2009 and there will be individual opportunities that you want to take advantage of and we have the cash for it,” Dobson said referring to the fund manager’s 500 million pound cash balance.