BlueBay Asset Management, the London-listed firm which runs long-only and hedge fund products in the credit market arena, said its profit before tax and exceptional items in the year ended 30 June fell by more than half to £22.3 million ($36.5 million) from £50.1 million in the previous year, with tough market conditions and reduced fee income taking a toll on results.

Assets under management stood at $24.3 billion at the end of June, a rise from $21 billion from the same data last year. (The firm accounts for its assets in dollars, not sterling).

The firm’s operating margin shrank to 20.8 per cent from 40.7 per cent.

"BlueBay entered the 2009 financial year against the backdrop of a credit market crisis already a year old. The first half of the financial year saw the crisis intensify dramatically; culminating in the unexpected collapse of Lehman Brothers in the middle of September 2008,” said Hugh Willis, chief executive, in a statement.

“This gave rise to a very demanding second quarter to the financial year; as credit spreads spiked to levels previously unseen and disorderly markets prevailed. The second half of the financial year was characterised, however, by a notable improvement in markets; creating far more favourable industry conditions for participants,” he added.