Schroders prepares for board shake-up Andrew Beeson, founder of the stockbroker Beeson Gregory, will take over as chairman of Schroders in May, the asset manager said, as it reported a slight rise in earnings last year. Mr Beeson, Schroders" senior independent director, will replace Michael Miles, who has been chairman since 2003. Alan Brown, chief investment officer, will also step down from the board. A person close to the company said this was not related to any concerns about Mr Brown's performance and that he would continue to advise Schroders" larger clients. The company reported net inflows of £3.2bn last year and had assets under management of £187.3bn at the end of December, a 5 per cent year-on-year fall, after its managers" investments lost value amid falling markets. While Schroders garnered £6.8bn of net new funds from institutional investors, it suffered net outflows of £3.8bn from its intermediary business, catering to retail investors. "This will remain a very volatile environment," said Michael Dobson, chief executive. However, he said investor sentiment had improved in the past two months and that Schroders had enjoyed net inflows of retail funds this year. Revenue rose 4 per cent over the previous year to £1.5bn but Schroders" net revenue as a proportion of assets under management declined from 0.59 per cent to 0.56 per cent. Mr Dobson said the fall was a result of an increase in the proportion of institutional assets under management, which offer fund managers a smaller margin than retail funds. "I expect to see [the net revenue margin] tail off but for positive reasons," he said, stressing the "longevity" of funds held by institutional investors, which are slower to withdraw money than retail investors. We have been intent for several years on turning round the institutional business, which was suffering outflows until 2009. Earnings per share rose from 108.3p to 111.9p, while pre-tax profit increased 0.1 per cent to £407.3m. Keith Baird, an analyst at Oriel Securities, said that Schroders" earnings were likely to decline this year. He pointed to pressure from investors on fees, and to the growing popularity of exchange-traded funds, which he said were "cannibalising active fund managers like Schroders." Justin Bates, an analyst at Keefe, Bruyette & Woods, argued that the company's gross cash reserve of £2.3bn would strike some investors as excessive, and that rivals such as Aberdeen Asset Management, which tend to return more cash to shareholders, were more attractive. A strong cash balance "can be a strength but not if you don't use it to your advantage," Mr Bates said. The full-year dividend was 39p, up from 37p last year. The shares fell 0.7 per cent to £15.50.