25th Apr 2008 07:00
F&C Asset Management PLC25 April 2008 F&C Asset Management plc Interim management statement 25 April 2008 F&C Asset Management plc is today issuing an interim management statement forthe three months to 31 March 2008. • Assets under Management of £101.8 billion at 31 March 2008 • Positive net sales in UK Retail and International Wholesale despite market conditions • £168 million gross sales of UK Retail funds (Q1 2007: £150 million) • £298 million gross sales of International Wholesale funds (Q1 2007: £55 million) • Reduced outflows in insurance and institutional business F&C has continued to pursue its stated strategy of targeting higher margin andspecialist new business. Despite the significant challenges of volatile equity markets, illiquid creditconditions and a general deterioration in retail investor sentiment, we havemade further progress in the higher margin client categories. Furthermore ourdiversified asset mix, client base, currency exposure and long term contractshave provided relative stability in our headline assets under management duringthis turbulent period. Fund Flows Overall net sales of our UK retail funds remained positive during the quarterand gross sales of £168 million were 12 per cent. higher than the £150 millionachieved in Q1 2007. Strong progress has also been made in our InternationalWholesale business where gross sales of £298 million in Q1 were actually higherthan full year sales of £201 million during the calendar year 2007. A small net outflow of £45 million in investment trusts reflected the impact ofshare buy backs and changes in gearing. Lower margin client categories continued to experience net outflows. In the caseof Sub-Advisory business, net outflows of £383 million reflected the continuedtrend in Portugal away from money market funds into banking products. A netoutflow of £328 million in insurance assets was substantially lower than the£1.6 billion net outflow that we experienced in Q1 2007. We continued to win new institutional business during Q1 2008 despite the impactof corporate uncertainty resulting from Friends Provident, our 52% shareholder,announcing that it no longer sees its shareholding in F&C as part of its revisedstrategy. Institutional outflows of £1.6 billion were lower than the same periodlast year and included £613 million which had been liquidated into cash during2007 and on which we have not earned fees since that date. Outlook Given the market environment, management has taken a proactive approach tooverall cost control while focusing resources on specific initiatives that willhelp drive new business wins and revenue generation. As stated in our preliminary annual results announcement, while adverse marketconditions and the resolution of our long-term ownership are likely to impactthe timeline of delivery for our three-year plan we remain committed to theoverall strategic direction outlined last year. Our relentless focus is toensure that we generate long-term value for shareholders from those cornerstoneinvestments in people, products and infrastructure made during 2007. Alain Grisay, Chief Executive of F&C, commented: "We have a clear strategy and against the backdrop of volatile markets andinvestor uncertainty we have continued to demonstrate strong progress in ourhigher margin retail and wholesale businesses, in-line with that strategy. Inthe institutional market while we continue to win new business our sales arebeing impacted in the short-term by the current period of corporate uncertainty.We believe the Group will increase its rate of progress once market conditionsstabilise and our long term ownership is resolved." For further information please contact: F&C Jason Hollands - Director, Head of Group Communications +44 (0) 20 7011 4168 [email protected] Tulchan CommunicationsDavid Allchurch +44 (0) 20 7353 4200 [email protected] John Sunnucks +44 (0) 20 7353 4200 [email protected] Forward-looking statements This interim management statement may contain "forward-looking statements" withrespect to certain of F&C Asset Management plc's (FCAM) plans and its currentgoals and expectations relating to its future financial condition, performance,results, strategy and objectives. Statements containing the words "believes", "intends", "expects", "plans", "seeks" and "anticipates", and words of similarmeaning, are forward-looking. By their nature, all forward-looking statements involve risk and uncertaintybecause they relate to future events and circumstances which are beyond FCAM'scontrol including among other things, UK domestic and global economic andbusiness conditions, market related risks such as fluctuations in interest ratesand exchange rates, and the performance of financial markets generally; thepolicies and actions of regulatory authorities, the impact of competition,inflation and deflation; the timing, impact and other uncertainties of futureacquisitions or combinations within relevant industries; and the impact ofchanges in capital, solvency or accounting standards, and tax and otherlegislation and regulations in the jurisdictions in which FCAM and itsaffiliates operate. As a result, FCAM's actual future financial condition,performance and results may differ materially from the plans, goals, andexpectations set forth in FCAM's forward-looking statements. FCAM undertakes noobligation to update the forward-looking statements contained in this statementor any other forward-looking statements it may make. Nothing in this publicationshould be considered as a profit forecast. Assets Under Management and Fund Flows The tables below disclose Assets Under Management (AUM) at 31 March 2008 andFund flows for the three months to 31 March 2008. 1. Assets Under Management 31 March 31 December 2008 2007 £bn £bn Insurance Funds 58.8 58.9 Institutional Funds 26.7 27.3Sub-Advisory 6.2 6.5 Investment Trusts 6.0 6.6UK Retail (Mutual Funds) 3.0 3.3International Wholesale (Mutual Funds) 1.1 1.0 Total 101.8 103.6 31 March 31 December 2008 2007 •bn •bn Insurance Funds 73.6 80.2 Institutional Funds 33.6 37.1Sub-Advisory 7.8 8.9 Investment Trusts 7.5 9.0UK Retail (Mutual Funds) 3.8 4.5International Wholesale (Mutual Funds) 1.3 1.3 Total 127.6 141.0 2. Assets Under Management 31 March 31 December by Asset Class 2008 2007 £bn £bn Fixed Interest 56.6 53.5 Equities 33.9 37.0 Property 5.3 5.3 Other Alternative Investments 2.0 1.9 Money Market 4.0 5.9 Total 101.8 103.6 31 March 31 December 2008 2007 •bn •bn Fixed Interest 70.9 72.9 Equities 42.5 50.3 Property 6.6 7.3 Other Alternative Investments 2.5 2.5 Money Market 5.1 8.0 Total 127.6 141.0 3. Fund Flows a) Fund flows for the quarter to 31 March 2008 Client Category Inflows Outflows Net £m £m £mInsurance Funds N/A N/A (328)Institutional 388 (1,568) (1,180)Sub Advisory 101 (484) (383)Investment Trusts 35 (80) (45)UK Retail (Mutual Funds) 168 (109) 59International Wholesale (Mutual Funds) 298 (115) 183Total N/A N/A (1,694) Note to Editors F&C Asset Management plc (F&C) is a London Stock Exchange listed pan-Europeanasset manager and a constituent of the FTSE Mid 250 Index. F&C manages in excessof £100 billion of assets for a diverse range of institutional, insurance andretail clients. The group has offices in nine countries. It has a major presencein the UK retail market with strength in corporate bonds, UK and Europeanequities, multi-manager and ethical funds. F&C was formed in 2004 as a result of the merger between ISIS Asset Managementand F&C Group. It has a rich brand heritage, tracing its origins back to thelaunch of the Foreign & Colonial Investment Trust, the first ever investmenttrust, in 1868. Foreign & Colonial Investment Trust, which is currentlycelebrating its 140-year anniversary, remains a client of F&C today. A new management team, led by Alain Grisay as CEO and David Logan as CFO, wasinstalled in 2006. Management strengthened a number of investment teams with newrecruits and moved towards a more multi-specialist/multi-boutique investmentmodel where teams have greater ownership over their products and processes. In 2007 F&C's Board and major shareholders approved a 3-year plan, aimed atgenerating significant organic growth from new, diverse revenue streams inhigher margin product areas such as retail/wholesale investments and specialistmandates. The plan involved a step up in investment in the business during2007, through people, products and infrastructure with the goal of generatingsignificant shareholder value by end of 2009. 2007 saw good progress in executing the first phase of the 3-year plan, with arecord year for F&C's UK retail business, a significant number of new productlaunches, additional hires to the investment and distribution teams, theconsolidation of F&C's operations in-house and the implementation of newDecision, Risk and Dealing systems. Strong investment performance was validatedby a 119% increase in performance fees, to record levels of the business. F&Cbeat consensus earnings estimates for 2007 with underlying Earnings Per Share of10.4 pence. Sustaining strong investment performance remains a top priority whileincreasingly F&C is focused on distribution during 2008. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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