Schroders loses CEO

August 31, 2001 Posted: 0753 GMT

LONDON (CNN) -- Fund management company Schroders parted company with chief executive David Salisbury as it unveiled a two-thirds drop in half-year profits.

The London-based pension fund manager said Salisbury resigned after just over a year as CEO, and 27 years with the company altogether.

He leaves as Schroders continues to suffer from defections by asset management clients, who withdrew nearly £6 billion ($8.8 billion) of funds from the company in the first half of this year in search of better returns.

Schroders (SDR) said net profit fell to £31.1 million, down 68 percent from the same period a year earlier, as funds under management shrank to £122.6 billion at the end of June, down more than 15 percent from June 2000, hit both by withdrawals by clients and the sinking value of its investments amid weak stock markets.

First-half profits from asset management were down by more than a third from a year earlier at £52.3 million.

Schroders' other income generator, its private equity business, seeks to drum up profits from equity investments in small companies. But it sank to a first-half loss of £8.5 million from a £50.3 million profit a year earlier.

Most of the private equity unit's loss stemmed from a drop in the value of Schroders' 12.8 percent stake in Schroder Ventures International Investment Trust, which shrank in value this year, in contrast with the leap in its value in the first half of 2000.   

The company said in a statement its investment performance was improving to such an extent that it expects to turn round the ouflow of institutional investors' money. But it also warned that the difficult environment for equity markets could continue in the near term – probably meaning more pressure on profits.

Chairman Peter Sedgwick will take on the vacant CEO's post until Schroders finds a replacement for Salisbury.  

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