* Aberdeen net outflows 2.8 bln sterling
* Jupiter net outflows 225 mln sterling
* Assets rise after market, performance gains
* Managers face tough environment in 2012
By Tommy Wilkes and Laurence Fletcher
LONDON, Jan 19 British asset managers
suffered a wave of withdrawals in the final three months of last
year, as clients fretting about a deepening euro zone crisis and
choppy financial markets trimmed exposure to investment funds.
Jupiter Fund Management reported its first quarter
of net outflows since returning to the London Stock Exchange in
June 2010, while Aberdeen Asset Management saw clients
accelerate withdrawals at the end of last year.
Investors, rattled by volatile markets, have been pulling
back from riskier investments across the fund management
industry, often plumping instead for cash or passive products.
The trading updates follow Wednesday's news that Man Group
, the world's biggest listed hedge fund manager, would
cut more jobs after suffering heavy client exits in the fourth
UK industry body the Investment Management Association said
this month that equity funds suffered their largest outflow on
record in November.
"Given economic headwinds and deteriorating public and
household finances across the euro zone and UK, financial
markets are likely to remain volatile and flows subdued,"
Jupiter said in its trading statement on Thursday.
Analysts, however, said the resilience of demand for
higher-margin products supported company bottom lines and made
them among the sector's top picks.
Jupiter shares were up 1.04 percent by 1040 GMT, while
Aberdeen's were down 2.57 percent, against a 0.93 percent rise
in the FTSE 250 index.
Aberdeen said a net 2.8 billion pounds ($4.31 billion) of
client money left its business in the three months to
end-December. Oriel analyst Keith Baird said Aberdeen's outflows
were higher than he had expected.
Outflows were largely from lower margin assets such as fixed
income, and the loss of one global mandate. The firm lost 1.7
billion pounds the previous quarter.
But clients continue to buy into its higher-margin Asian and
emerging market debt funds which, along with positive
performance and market gains, helped total assets rise to 173.9
billion pounds, up 2 percent on three months earlier.
"The slowdown in gross sales (in Q4) is welcome. We've been
trying to slow down sales in areas where we have capacity
constraints. It's mainly emerging market equities -- where we've
been trying to slow sales and get margins up -- and global,"
Aberdeen Chief Executive Martin Gilbert told an analysts' call.
"My instinct is that they've got better," he added,
referring to January flows.
For London-based Jupiter -- which invests the bulk of its
assets in equities, and counts the UK investor as its core
customer base -- the fourth quarter marked the end of a run of
consecutive periods attracting more money than it lost.
The firm, which runs 22.8 billion pounds in assets and is
headed by chief executive Edward Bonham Carter, said the poor
environment for retail sales and the loss of a single segregated
mandate from an institutional client resulted in 225 million
pounds of redemptions.
This included 93 million pounds of outflows from its mutual
funds business, where most Jupiter assets lie, the firm said.
JP Morgan analysts reduced their 2012 estimates to reflect
weaker expected client flows over the next six months.
"This leaves Jupiter's profits flat year on year, a
relatively good outturn in a sector where we expect most
companies to report declining profits this year," they said in a
Elsewhere, upmarket manager St James's Place, which
focuses on wealthy clients, said on Thursday total new business
rose 10 percent last year.