Reuters: Financial Services and Real Estate: UPDATE 2-F&C shows fresh outflows as strategic review nears

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UPDATE 2-F&C shows fresh outflows as strategic review nears May 9th 2012, 12:35 Wed May 9, 2012 8:35am EDT * Outflows total 1.7 bln stg, outweigh retail inflows * Second part of strategic review to be announced May 15 * F&C confirms CEO Grisay retires from board * Assets under management 101.8 bln stg at end-March * Shares fall 2.3 percent By Tommy Wilkes LONDON, May 9 (Reuters) - UK funds house F&C Asset Management revealed further outflows in the first three months of 2012, underperforming its rivals and raising the stakes ahead of a turnaround plan expected this month. F&C, which is set to detail its executive chairman's plans for the retail part of its business next week, reported outflows of 1.7 billion pounds ($2.7 billion) as institutional client exits outweighed a small rise in retail flows. F&C also confirmed in a separate statement that Alain Grisay, its chief executive for the last six years, had stepped down from the board with immediate effect. Grisay first announced his plan to retire from the group last October in a move giving Edward Bramson, the activist investor who won a boardroom coup last year, a more hands-on role - as executive chairman - implementing his planned shake-up of the fund manager. Shares in F&C were down 2.5 percent on Wednesday at 1330 GMT, underperforming a 1.2 percent drop in the FTSE 250. Several other asset managers including Aberdeen Asset Management and Schroders have reported inflows this year, while Jupiter Fund Management said clients were returning to its mutual funds as investors regain their appetite for riskier products. London-based F&C is attempting to refocus its business on institutional clients, part of a strategic review pursued Bramson. Bramson is set to report the findings of the second half of the review, which will detail plans for F&C's retail, real estate and investment trust businesses on May 15. Investors will be keen to hear Bramson's future plans for F&C. Since he won a shareholder vote to become chairman at F&C in February 2011, shares in the funds house have fallen more than 20 percent against a 6 percent fall in FTSE 250. Analysts at Numis said it remained difficult to build a long-term case for investment in F&C because of significant uncertainty in how the group might look in future, despite its stock looking fairly cheap versus rivals. "We can understand the appeal of taking a speculative punt in the stock given the apparent cheapness in relation to earnings ... Nonetheless, we do not believe there is enough clarity as to the future strategy or shape of the group for long term investors to buy at this time," they said in a note. F&C suffered 7.2 billion pounds of net outflows last year after some of its key customers pulled assets. The group said on Wednesday the outflows this year included key client exits, the loss of third-party institutional cash and withdrawals from the Thames River Global Bond products. The retail business managed to gain 13 million pounds of client money, however, and assets under management across the group rose 1.7 percent to 101.8 billion pounds at end-March as the rally in bond and stock prices boosted investment performance. F&C also said its volume of awarded but unfunded mandates increased during the quarter, resulting in an institutional net pipeline of 1 billion pounds. Link this Share this Digg this Email Reprints

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