F&C bullish despite 6% fall infunds under management

Published on Monday 27 April 2009 21:45

FUND manager F&C Asset Management yesterday posted a 6 per cent decline in assets under management in the first quarter of the year.

The firm said net outflows of client money had continued, though at a slower rate.

F&C said its market remained difficult, but highlighted what it claimed was a revival in its relationships with investment consultants, who are important in bringing in new business in the UK.

F&C said the drop in assets under management to 92.7 billion was mainly caused by the weakness of the pound against the euro.

However, it also recorded 1bn of net outflows during the quarter, compared to outflows of 1.7bn in the same period last year and to 4bn in the previous quarter.

In 2004, F&C's reverse takeover of Isis Asset management created the UK's fourth biggest fund manager.

Its head office is in London but, as a result of the takeover, F&C has a sizeable presence in Edinburgh, employing around 130 staff.

The Edinburgh office was once part of Ivory & Sime, which was bought by insurer Friends Provident five years ago in a deal which formed Friends Ivory & Sime. Three years later, FIS merged with the investment management arm of Royal & Sun Alliance in a deal that doubled its funds under management and introduced the Isis name.

In yesterday's statement, F&C said it had won 1bn worth of institutional new business in the first quarter, including a "significant mandate" to manage a UK real-estate portfolio formerly owned by the Dawnay Day group, which is in administration.

It said it had an unfunded prospect of new institutional business totalling 1.3bn at the end of the quarter, including new mandates won through investment consultants, who did no business with the fund manager during 2008.

The company said: "The major economies continue to be in recession and face difficult headwinds. We remain cautious in our outlook and continue to be vigilant on cost control."

According to the firm, it had made good progress on a 15 million cost-cutting programme announced in December.

Chief executive Alain Grisay, added: "The operating environment for asset managers remains challenging but F&C has the right model and the right strategy in place to trade profitably and to benefit strongly from the market recovery when it comes.

"We have taken action to control our costs, are focused on investment performance and continue to innovate in order to meet the changing needs of clients. F&C has a robust financial position and is well positioned to take advantage of acquisition opportunities should they arise."