F&C reports mixed messages on markets

THE volatility of financial markets was spotlighted yesterday when F&C Asset Management revealed assets under its control rose to £95.3 billion in the first six months of 2010, up from £88.3bn in the same period last year.

However, funds under management at the firm, which has a sizeable Scottish presence, with about 130 staff in Edinburgh, were down from the 97.8bn recorded at the end of 2009.

F&C, which has its finance department in the Scottish capital as well as running some investment trusts from Scotland, saw its headline statutory losses more than double to 19.5 million against 8.7m last time.

But, stripping out exceptionals, its underlying operating profits rose to 26m from 19m. Alain Grisay, group chief executive, blamed the 2.6 per cent dip in assets under management on "volatile markets and a weakening euro".

F&C, whose head office is in London, said its three key priorities were "to accelerate revenue growth, manage the cost base to create greater flexibility and to strengthen our capital position through the progressive reduction of debt funded in part through a reduced dividend".

The interim dividend is halved to 1p from 2p. Grisay said that after a strong start to 2010 "the second quarter saw a sharp downturn in equity indices and renewed dislocation in fixed income markets as investors became preoccupied with concerns about government debts levels in Europe".