F&C set for £12m of cost cuts
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F&C Asset Management has announced plans to cut the annual costs on its business by £12m.
The firm is set to appoint a new outsourcing provider in a bid to diversify its business and cater for new client needs.
F&C says the appointment will affect approximately 110 staff, which represents around 70 per cent of its existing operations staff, many of which are expected to transfer over to the appointed provider. The group will reorganise its remaining business processes around the outsourced model. F&C says the restructuring programme will create an operational cost base that varies with assets under management and transaction levels.
F&C says that the restructuring programme will reduce costs by at least £9m, with saving starting in the second quarter of 2011. A further £3m will be made through a downsizing of its premises requirement due to the smaller headcount.
The asset manager says it will continue to review further opportunities for cost reduction, including potential product mergers.
Earlier this month, F&C has called on shareholders to vote against Sherborne Investors’ plans to remove chairman Nick MacAndrew and Brian Lacombe from F&C’s board.
Sherborne, which has built up a 17.5 per cent stake in the asset manager, wants to appoint founder Edward Bramson as well as Ian Brindle and Derham O’Neill to the board, with the hope of Bramson taking on the chairman’s role.
Sherborne has requisitioned a general meeting to propose the changes on February 3.
F&C says its current strategy is working and it believes that these calls by Sherborne are damaging and destabilising to the business.
F&C chief executive Alain Grisay says: “After several months of careful research and due diligence I am pleased we can announce this major step in ensuring we have a more flexible cost base which can adjust better to accommodate changes in our business mix. These developments will ensure we have the right operational platform to respond effectively to the evolving needs of our clients and as we continue to diversify the business beyond its historic focus on insurance mandates.”
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