ISIS hit by shift from balanced mandates
UK - ISIS Asset Management says it has been hit by the trend away from balanced mandates.
The company said there were "some institutional losses" in the first half of 2003, "influenced by the continued trend away from balanced mandates to core/specialist structures". It lost a net 245 million pounds of institutional cash in the first half.
"Our medium-term record on balanced funds has been below average for some while, partly due to over-adherence to a growth investment style,” the company said in its first-half earnings statement.
It added that chief investment officer Robert Talbut’s changes have started to have an impact. It added that investment performance has become more stable.
ISIS said it has met investment consultants in order to explain its new approach. “Inevitably it will take some time for these efforts to bear fruit.”
Overall, its assets under management for institutional clients were flat at 4.4 billion pounds, compared to end-2002. Total assets under management rose to £60.8 billion from 60.1 billion pounds at the end of last year.
ISIS also said it could be looking at acquisitions to boost growth. "We continue to seek out ways which would enable us to further develop our business, both organically and by acquisition, if appropriate," said chairman Sir David Kinloch.
Pre-tax profit before goodwill amortisation and exceptional costs fell to 11.4 million pounds from the 2002 period's 12.7 million pounds. Net revenue rose to 51.8 million pounds from 35.3 million pounds.
Kinloch said the fund management industry was “encountering a period of significant change, both business and regulatory, and this will pose both threats and opportunities”.
He questioned the regulatory burden faced by UK asset managers. "I urge policy makers and regulators to focus on good regulation and investor protection and to avoid seeking to become involved in interfering with proven business practices and defining how the commercial environment should work."
The firm added that it is on track to reduce its staff numbers to 500 by the end of the year, from 559 at January 1 2003.
ISIS added the that integration of Royal & SunAlliance Investments was now substantially complete and "ahead of target in all respects".