UK – F&C Asset Management has announced that it expects client Friends Life to withdraw a further £6.2bn (€7.6bn) of fixed income assets during the coming year, a move that already mirrors an outflow of £2.4bn in the past quarter.
The news came as F&C announced that assets under management (AUM) slipped to £95.2bn (€110bn) as of 31 December, compared with the previous quarter when it stood at £96.8bn.
However, F&C chief executive Richard Wilson remained positive.
"Performance in the quarter was good in most asset categories and revenue yields on inflows continue to exceed those on outflows," he said, adding that he anticipated further growth on back of the company's third-party institutional and consumer strategies.
The asset manager said that it expected the impact of further withdrawals by Friends Life on its 2013 revenues to be moderate, with assets expected to be withdrawn around mid-year.
The pensions, investment and insurance company is looking to manage its fixed-income assets internally, but F&C still expects to manage about £2.4bn of remaining fixed-income assets for them after withdrawals.
The outflow meant AUM in its strategic partner unit declined to £58.5bn as at 31 December 2012 from £60.0bn at the end of the previous quarter, despite favourable investment.
Consumer and institutional AUM stood at £36.75bn at the end of the most recent quarter, £9m more than the previous quarter at September end, which was also boosted by £300m as the euro strengthened against sterling. Still, consumer and instutional investment performance returned £1 billion during the quarter.
It encountered £800m of gross third-party institutional inflows in the quarter, taking the total for the year to £2.9bn. Revenue yield was approximately 32 basis points for the quarter. However gross outflows within this business stood at £1.7bn for the quarter due to cash management and government bond mandates of £1.3bn. The majority of remaining outflows related to £0.2bn of property asset realisation.