Reuters.uk – Investment manager Schroders (SDR.L: Quote, Profile, Research) reported an 18.5 percentrise in pretax profit for 2005 and said on Tuesday it was buying a hedge fund business for up to $142 million.
Profits before tax rose to 250.7 million pounds from 211.6 million in 2004. The figure includes a gain of 20.4 million pounds from the termination of an outsourcing contract with JP Morgan (JPM.N: Quote, Profile, Research) last year.
Analysts had forecast profit before tax and one-off items, which would include the JP Morgan payment, of 224.1 million pounds.
The fortunes of Schroders, one of the country’s oldest independent fund management firms, have recovered since stocks rebounded in 2003.
Improved markets helped drive Schroders’ revenues, and gross profit margins — revenues as a percentage of assets — rose to 51 basis points compared with 46 bps in 2004.
In a separate announcement, Schroders said it had agreed to buy 100 percent of NewFinance Capital, a London-based manager of funds of hedge funds. It will pay a $101 million (58 million pounds) consideration and up to a further $41 million contingent on meeting revenue targets.
