UPDATE 2-Henderson assets fall but Q2 seen improving

* Q1 AuM fall 12 pct

* Net outflows 3 bln stg

* Says "signs of improvement" in Q2

* Stock down 4.7 pct

LONDON, May 11 (Reuters) - Anglo-Australian asset manager Henderson Group (HGGH.L) on Monday posted a fall in assets under management (AuM) in the first three months, but said it saw some signs of improvement in the second quarter.

Clients continued to pull out money during the first quarter, helping push AuM 12.3 percent lower to 43.4 billion pounds ($65.89 billion) since the end of December, excluding the AuM of recently acquired rival fund manager New Star.

Negative returns on investments and forex effects stripped out another 3.1 billion pounds from AuM.

"We experienced a difficult market and sales environment in the first quarter but have seen signs of improvement in the second quarter," Chief Executive Andrew Formica said in an AGM statement.

"With the exception of the previously notified Pearl withdrawals, we have seen only modest client withdrawals".

Of 3 billion pounds in net client outflows, 2.4 billion pounds came from insurer Pearl, for which Henderson managed 8.5 billion pounds at the end of the quarter. Other institutional withdrawals amounted to 600 million pounds.

"Since the end of the period we have seen increased interest from clients looking to shift back towards higher margin products. These factors, together with cost management initiatives, which we started last year, provide support to earnings," Formica said in the AGM statement.

At 0923 GMT, Henderson shares were down 4.65 percent at 82 pence, underperforming the FTSE 100, which was down 0.89 percent, but off the intraday low of down 6 percent, hit shortly before the trading statement was issued.

Analysts at Credit Suisse kept their "neutral" rating on the stock but highlighted the positive outlook for the second quarter and a "good pipeline" in fixed income funds.

Henderson, which completed its purchase of New Star last month, said the acquired business had 8.6 billion pounds in AuM at March 27, down from 11.1 billion pounds at end-Dec 2008 and more than 20 billion pounds before the credit crisis took hold.

Henderson took over New Star for 115 million pounds. "We still expect this transaction to be highly accretive for shareholders from 2010 onwards," Henderson said in a trading statement. [ID:nL9589836] ($1=.6645 Pound) (Reporting by Cecilia Valente; editing by Simon Jessop)