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F&C Asset Management (FCAM)

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Tuesday 03 May, 2011

F&C Asset Management

Interim Management Statement

RNS Number : 7081F
F&C Asset Management PLC
03 May 2011
 



 

 

F&C Asset Management plc

Interim management statement


 

3 May 2011

 

F&C Asset Management plc ("F&C" or "the Group") is today issuing an Interim Management Statement as required by the UK Listing Authority's Disclosure and Transparency Rules. This statement covers the three months to 31 March 2011.

 

Highlights

·      Assets under Management (AUM) increased to £106.1 billion at 31 March 2011

·      Net inflows (excluding insurance) of £195 million in the three months to 31 March 2011

·      Pipeline of unfunded new institutional business increased to £1.7 billion at 31 March 2011

·      Consolidated supervision waiver renewed with expiry date extended to April 2016

 

Alain Grisay, Chief Executive of F&C, commented:

 

"The first quarter saw a challenging backdrop for investors with upheaval across the Middle East and North Africa, rising oil prices, the natural disaster in Japan and the ongoing European sovereign debt crisis. Against this backdrop F&C posted another quarter of net inflows, ex. insurance, with an improving revenue mix. While the Board review of strategy is ongoing, management's operational focus remains the delivery of strong investment performance, new business generation and the completion of our back and middle office outsourcing project. Overall the business continues to trade in line with management's expectations."

 

Assets under Management

The Group's AUM increased from £105.8 billion at 31 December 2010 to £106.1 billion at 31 March 2011.

 

AUM was positively impacted by a 3.2 percent appreciation in the Euro against Sterling, higher equity market levels and net business inflows (excluding insurance). Negative impacts on AUM were a decline in fixed income market levels and an approximate £0.7 billion reduction in the value of derivative contracts held for hedging purposes within client portfolios.

 

Business Flows

 

During the first quarter we saw net inflows, excluding insurance funds, of £195 million.

 

We generated gross new institutional business of £1.1 billion (Q1 2010: £0.9 billion) with an additional pipeline of £1.7 billion of won but unfunded mandates at the end of the quarter (31 December: £1.5 billion).

 

Gross sales of open-ended funds (onshore and offshore) were £1.5 billion (Q1 2010: £0.5 billion) and net sales were £631 million. These included assets added following the appointment of our emerging equities team with effect from 1 February as manager of two Dublin-domiciled open-ended funds. Following notified and expected outflows during the transition of these funds to our management, the AUM in these funds was £0.4 billion at 31 March and had reduced to £0.3 billion as at 26 April.

 

As a result of the average revenue margin on offshore open ended funds being some 9 times greater than the revenue margin on insurance assets and approximately 3.8 times greater than that on institutional assets, these net flows will have a more significant impact on the Group's revenues than on our AUM.

 

Business Developments

 

As previously announced the Board is conducting a review of strategy, which is ongoing. Details of the outcome of this review will be reported to the market in due course. In the meantime we continue to focus on the implementation of previously announced plans. 

 

A key initiative is our project to outsource certain operational functions to a specialist provider, which will improve the flexibility of our cost base. Subject to final Board approval, we remain on track to sign an agreement with our preferred supplier by the end of Q2 2011.

 

We have also launched, or are in the process of launching, a number of new products. These include UCITS III absolute return funds investing in European Equities, Global Emerging Markets and Global High Yield Bonds. The Group's strength in sustainable investing has recently been recognised by our appointment by the National Employee Savings Trust (NEST) to manage their Ethical Fund option.


The Group operates under an FSA waiver from meeting any minimum capital requirements under the consolidated supervision rules of the Capital Requirements Directive, as do a number of its peers. This waiver was due to expire at the end of 2011. During the quarter we applied to renew this waiver and can confirm that the FSA has extended its expiry date until April 2016.

 

 

- ENDS -

 

 

For further information please contact:

 

F&C Asset Management

Jason Hollands - Director, Head of Corporate Affairs                     +44 (0) 20 7011 4168

                                                                                                jason.hollands@fandc.com

 

Tulchan Communications

Christian Cowley / John Sunnucks                                               +44 (0) 20 7353 4200

                                                                                                F&C@tulchangroup.com

 

Forward-looking statements

 

This interim management statement may contain "forward-looking statements" with respect to certain of F&C Asset Management plc's (FCAM) plans and its current goals and expectations relating to its future financial condition, performance, results, strategy and objectives. Statements containing the words "believes", "intends", "expects", "plans", "seeks" and "anticipates", and words of similar meaning, are forward-looking.  By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond FCAM's control including among other things, UK domestic and global economic and business conditions, market related risks such as fluctuations in interest rates and exchange rates, and the performance of financial markets generally; the policies and actions of regulatory authorities, the impact of competition, inflation and deflation; the timing, impact and other uncertainties of future acquisitions or combinations within relevant industries; and the impact of changes in capital, solvency or accounting standards, and tax and other legislation and regulations in the jurisdictions in which FCAM and its affiliates operate.  As a result, FCAM's actual future financial condition, performance and results may differ materially from the plans, goals, and expectations set forth in FCAM's forward-looking statements.  FCAM undertakes no obligation to update the forward-looking statements contained in this statement or any other forward-looking statements it may make. Nothing in this publication should be considered as a profit forecast.

1.       Summary of AUM and Flows

 

 


AUM

1 January

2011

Jan - Mar

Inflows*

Jan - Mar

Outflows*

Jan - Mar

Insurance net flows

Jan - Mar

Market movement

AUM

31 March 2011


£bn

£bn

£bn

£bn

£bn

£bn








F&C Group ex. Thames River

100.5

2.2

(2.1)

(0.7)

0.8

100.7








Thames River

5.3

0.4

(0.3)

-

-

5.4








Total

105.8

2.6

(2.4)

(0.7)

0.8

106.1

 

* Excluding insurance flows

 

 

Further analysis of assets and flows is given in the subsequent sections of this announcement.

 



2.       Assets Under Management (AUM)

 

 

(a)      AUM - by client category

 

 

In Sterling

 

31 March

 2011


31 December

 2010

    

£bn


£bn





Insurance Funds

59.2


59.5





Institutional Funds

29.1


29.3

Sub Advisory

3.1


3.0





Investment Trusts1

6.0


5.9





Open Ended Funds (UK Onshore)2

3.8


3.5

Open Ended Funds (Offshore)3

4.9


4.6

Total Open Ended Funds

8.7


8.1





Total

106.1


105.8





 

 

 

In Euros

 

31 March

 2011


31 December

 2010

    

€bn


€bn





Insurance Funds

67.0


69.4





Institutional Funds

32.9


34.2

Sub Advisory

3.5


3.5





Investment Trusts1

6.8


6.9





Open Ended Funds (UK Onshore)2

4.3


4.1

Open Ended Funds (Offshore)3

5.5


5.4

Total Open Ended Funds

9.8


9.5





Total

120.0


123.5

 

1 Includes all listed closed ended companies managed by the Group

UK domiciled OEICs and Unit Trusts

3 Includes Luxemburg SICAV funds, Dublin domiciled OEICs, open ended Cayman funds and funds of alternative investment funds

 



(b)      AUM - by asset class

 

 

In Sterling

31 March

2011


31 December

2010


£bn


£bn





Fixed Interest

60.6


62.0





Equities

29.2


28.7





Property

8.2


8.2





Alternative Investments4

2.3


2.4





Liquidity

5.8


4.5





Total

106.1


105.8

 

 

 

In Euros

31March

2011


31 December 2010


€bn


€bn





Fixed Interest

68.5


72.4





Equities

33.0


33.5





Property

9.3


9.6





Alternative Investments4

2.6


2.8





Liquidity

6.6


5.2





Total

120.0


123.5

 

Alternative Investments includes non-UCITs Alternative Investment Funds, Funds of Alternative Investments Funds, Private Equity Funds and fund based products with active derivative overlay strategies.

 

 



3.       Fund Flows

 

 

a)       Fund flows for the three months to 31 March 2011

 

 

Client Category

Inflows


Outflows


Net


£m


£m


£m







Insurance Funds

N/A


N/A


(690)







Institutional Funds

1,102


(1,390)


(288)

Sub Advisory

25


(116)


(91)







Investment Trusts

-


(57)


(57)







Open Ended Funds (UK Onshore)

193


(153)


40

Open Ended Funds (Offshore)

1,276


(685)


591

Total Open Ended Funds

1,469


(838)


631







Total

N/A


N/A


(495)







of which relates to Thames River

431


(337)


94

 

 

 

b)       Fund flows for the twelve months to 31 December 2010

 

 

Client Category

Inflows


Outflows


Net


£m


£m


£m







Insurance Funds

N/A


N/A


(780)







Institutional Funds

3,941


(3,180)


761

Sub Advisory

353


(896)


(543)







Acquisition of Thames River

4,232


-


4,232







Investment Trusts

140


(511)


(371)







Open Ended Funds (UK Onshore)

712


(492)


220

Open Ended Funds (Offshore)

994


(789)


205

Total Open Ended Funds

1,706


(1,281)


425







Total

N/A


N/A


3,724







of which relates to Thames River

621


(311)


310

 

 



4. Thames River AUM and fund flows

 

 


AUM

1 January

2011

Jan - Mar

Inflows

 

Jan - Mar

Outflows

 

Jan - Mar Market

movement

AUM

31 March 2011


£m

£m

£m

£m

£m







Institutional Funds

291

-

-

(3)

288







Investment Trusts

872

-

(25)

49

896







Open Ended Funds (UK Onshore)*

1,159

61

(44)

(10)

1,166

Open Ended Funds (Offshore)

2,927

370

(268)

(18)

3,011

Total Open Ended Funds

4,086

431

(312)

(28)

4,177







Total

5,249

431

(337)

18

5,361

 

 

* AUM at 31 March 2011 includes £200m of cross-held insurance assets (1 January 2011: £216m).

 

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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