F&C sees AUM shrink in third quarter

F&C Asset Management saw assets under management shrink to £103.2bn during the third quarter, as difficult market conditions continued to plague asset managers.

The £103.2bn reported at the end of September contrasts with the £108bn in AUM at the end of June 2011.

The asset manager says positive investment performance during the third quarter was offset by currency movements and net outflows of £900m.

Net outflows in its open-ended funds business amounted to £559m, driven by offshore funds held by discretionary clients.

However, the asset manager saw net inflows into its UK retail business with gross sales of £212m.

F&C executive chairman Edward Bramson says: “The third quarter was a difficult one for the fund management industry given the sharp sell-off in risk assets.

“However, F&C’s AUM strongly benefited from the bias in our business mix towards less volatile asset classes, a characteristic we see as a core strength of the group.”

The asset manager announced it is to report back on a strategic review of its retail and wholesale business, investment trusts and F&C REIT during the first half of 2012.

F&C also announced it had increased its expense reduction target to £33.2m by 2013, up from its previous £12m target. This will include £10.7m in redundancy payments.

The incremental savings of £21.2m announced in its third quarter results include £16.7m in staff reductions, primarily related to back office and corporate staff “with limited impact on investment teams and client-facing personnel”.