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BGI sees assets fall and profits rise in 2002

UK/US Barclays Global Investors (BGI) saw total assets under management fall £30bn (E48bn) to £500bn in the first half of 2002, of which 7.2% was due to market changes. News assets inflow amounted to £33bn, but this was offset by £38bn due to adverse movements in markets, and £25bn to exchange rate translation effects.

The company operating profiting in the period increased 62% (£23m) to £60m(£37m for the same period in 2001), but 60% of this profit figure was due to a change in the timing of the recognition of management fees. About 60% of management fees are derived from actively managed assets, which now account for £85bn(17%) of assets under management.

The operating costs increased by 3% to £229m, at a lower rate than in previous periods, due to continuing cost management initiatives, says BGI. There was “particular focus on infrastructure costs, partially offset by higher performance related staff costs”. The cost income ratio fell to 79% from 86% as a result.

The global exchange traded funds business performed strongly, in spite of poor market conditions, with assets growing to £19bn, an increase of 19%, from the levels they were at the end of 2001.

Matthew Barrett, chief executive officer of Barclays, parent of BGI, has confirmed that the asset manager is to remain within the group, which now sees “new opportunities to further extend its global leadership”. This follows a strategic review, which had looked at disposing of the group.

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