Pre-Tax Profits Rise At F&C Asset Management, AuM Down

Tom Burroughes

15 March 2013

London-listed F&C Asset Management logged group underlying pre-tax profits in 2012 of £52.4 million ($78.3 million), up from £47 million in the previous year, while assets under management dropped to £95.2 billion from a year earlier.

Underlying earnings per share were 7.1 pence per share, up from 5.5 p.

The business had a group operating margin of 29.2 per cent, up from 24.4 per cent in 2011.

Commenting on the figures, Edward Bramson, executive chairman, noted that the drop in assets under management was mainly caused by net outflows of £13.3 billion and the adverse impact of foreign exchange rates, which amounted to £1.7 billion.

Net outflows during 2012 comprised £11.4 billion of strategic partner assets and £1.9 billion from F&C’s consumer and institutional business. Its wholesale division represented the largest contributor to consumer and institutional outflows, Bramson said.

“2012 was a challenging year for wholesale, with net outflows of £1.2 billion. Both the Thames River Global Credit and Global Bond products suffered significant outflows. In addition, the Thames River Multi-alternative division continued to experience outflows, reflecting the significant structural changes in the fund of hedge funds market,” he continued.

“We are encouraged by the performance of the third-party institutional business as the initiatives and structure resulting from phase one of our strategic review have been implemented. 2012 saw gross inflows of £2.9 billion, and withdrawals declined sharply during 2012 to £3.6 billion. Importantly, a significant portion of those assets withdrawn represented lower-margin cash management and government bond mandates,” he added.