GLOBAL - F&C Asset Management recorded net institutional outflows of £1bn in 2005 with the Netherlands business hit hardest.
The firm attributed the outflows, which were far less than the £4.5bn institutional inflows, to a continued industry trend away from balanced to specialist management.
Other causes noted included clients switching away from equities and bonds to other asset classes, and instances of disappointing investment performance, particularly in emerging equities.
Assets under management rose to £131bn at year-end, up from £124.8bn the previous year. Net revenue increased to £267m in 2005, compared to £152m in 2004.
At the year-end the aggregate F&C pension fund deficit had increased to £33.6m, the firm said, net of deferred tax. A non-executive committee of directors had been established to review the final salary pension funds to consider the level of the deficit, future funding strategies, the feasibility of combining the ISIS and F&C schemes, and the management of the proposed PPF levy.
F&C said it had identified opportunities in The Netherlands created by policy and regulatory developments, sparking growing interest in governance, socially responsible investing, asset liability management and liability driven investment.
New chief executive Alain Grisay said the group was developing products for LDI, alternatives, and specialist institutional mandates such as emerging market debt, high yield, high alpha equities, hedge funds and private equity fund of funds. The firm said 2005 had centred on the integration of ISIS Asset Management into the group, following the merger in October 2004, an effort which it said would reduce annualised costs by £33m.
The single largest setback was said to be the loss of Resolution Life assets, which the firm said would reduce annualised revenues by £27m. In 2005 Resolution Life announced it would internalise the management of its assets following its own merger with the Britannic Group.
The year 2005 was the first time the group’s full year statement was prepared under International Financial Reporting Standards (IFRS) - the 2004 statistics have been re-stated under IFRS accordingly.
By Lisa Haines
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