F&C still facing headwinds as strategic partner assets fall

LONDON, March 13 Thu Mar 13, 2014 3:29am EDT

LONDON, March 13 (Reuters) - Fund manager F&C Asset Management said it continues to face "significant headwinds" following a net outflow of money from the group of 19 billion pounds in 2013.

In an earnings statement on Thursday, F&C said the outflow comprised 20.3 billion pounds of money run for strategic partners which was partly offset by an inflow of 1.3 billion pounds from consumer and institutional clients.

The outflows amount to an annualised loss in revenue of 35.5 million pounds of which 11.3 million pounds is reflected in 2013 earnings, the company said.

"The strategic partner outflows predominantly reflect the maturity and changing nature of the contractual relationships with these parties, while the consumer and institutional inflows demonstrate the growing momentum in this area of our business," the company said.

However, the group noted 2013 was "a year of progress" and cost cutting targets have now been achieved, helping strengthen the operating margin to 36.9 percent from 29.2 percent a year earlier.

The group also achieved strong investment performance, with 80 percent of funds under management outperforming benchmarks over one and three year periods.

F&C shareholders are due to vote on a takeover offer from Bank of Montreal which offered 708 million pounds for the company in January.

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