Underperformance hits profits at Fortis Investments
FRANCE - Fortis Investments has seen its net profit fall to €25m in the fourth quarter of 2007, down 19% compared to the previous quarter.
Fortis received regulatory approval concerning its proposed demerger of Abn Amro Asset Management from ABN Amro bank at the end of January , but has now revealed its investment subsidiary's fund performance was impacted by the market turbulence in the second half of the year.
Presenting 2007's performance results, the firm announced the proportion of funds registering an above-benchmark performance fell to 54% over one year and 71% over three years.
The firm's assets under management stood at €133bn at the end of December last year, slightly up from the previous quarter and 10% higher than at the end of 2006.
Fortis said it saw new inflows for the year of €9.6bn, of which €3bn were generated in the fourth quarter.
"These increases were driven by strong sales figures earlier in the year," commented the firm, adding contributions also came from the transfer of Fortis' multi-management activities from Fortis Bank Netherlands to Cadogan Management, and the setting up of a joint venture in Russia during the first half of 2007.
The credit crises caused Fortis Investment to almost entirely write off all, around €9m, of its investments in the equity stakes in the CDOs it manages in the subprime market.
The company added "conservative provision have been made, in strict compliance with internal group policy," concerning its CDO business.
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