SWITZERLAND - Zurich Financial Services (ZFS) has been rocked by news that its fund management division made a US$14m loss during the first half of the year.
Assets under management declined 5% compared with the same period last year to us$416bn, with third party funds decreasing by 7% to US$241bn.
Net income by asset management, excluding the non-recurring factors, would have been US$69m, according to ZFS.
ZFS, registering a 6% decline in fees in its asset management business, claimed that profits were hit by a combination of weak equity markets, restructuring costs and asset write-downs. Overall ZFS' profits were down 33% for the first half to US$861m.
At a press conference, ZFS chairman and chief executive officer, Rolf Hueppi said that the firm was close to finishing its strategic review for its Zurich Scudder Investment (ZSI) unit. Hueppi's comments come as speculation mounts that Deutsche Bank has bid approximately $3bn for ZSI.
ZSI has also moved quickly to fill the void caused by William Truscott's departure. Farhan Sharaff, currently global chief investment officer (CIO), will handle Truscott's responsibilities as regional CIO for the Americas, in addition to his own. Truscott left to take up the CIO post at American Express Financial Advisors, the asset management arm of the credit card giant.
By Geoffrey Ho
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