F&C’s Assets Under Management Drop as Friends Life Pulls Funds

F&C Asset Management Plc, which runs the U.K.’s oldest investment trust, said assets under management declined 4.9 percent last year as clients including Friends Life pulled money from its funds.

Funds under management declined to 95.2 billion pounds ($142 billion) from 100.1 billion pounds in 2011, the London-based firm said today in a statement. Net outflows of 13.3 billion pounds and foreign-exchange rate movements offset a 10.1 billion-pound gain in assets prices, it said.

Edward Bramson, F&C’s chairman and largest shareholder through his hedge fund Sherborne Investors LLC, aims to boost performance of the fund manager by cutting costs, reducing debt and refocusing on traditional strengths such as investment trusts and managing fixed-income assets for insurers. Thames River, the hedge fund unit acquired by F&C before Bramson took charge, had “significant outflows” in 2012, the firm said.

Withdrawals from major clients such as Resolution Ltd.’s Friends Life in the U.K. were 5.3 billion pounds in the period, F&C said. Friends Life may withdraw a further 6.2 billion pounds in the first half after setting up its own fixed-income fund division, according to the statement.

Cost cuts helped boost underlying profit to 71.2 million pounds in 2012 from 65.2 million pounds a year earlier, F&C said. The lower assets under management caused net revenue to fall 9 percent to 243.5 million pounds.

F&C will pay a full-year dividend of 3 pence a share for 2012, unchanged from the previous year.

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