F&C has hit out at the continued uncertainty surrounding Friends Provident's 52% ownership in the firm, saying the speculation has hindered the fund manager's ability to gather new assets.
In its half year results released this morning, F&C chief executive Alain Grisay says the firm has been “constrained” by the fallout from Friends Provident’s decision to divest its interest in the asset manager and is working hard to find a satisfactory solution for both parties.
Friends Provident announced in January it would look to offload F&C, but has so far been unable to find a buyer at its valuation.
Friends’ woes were compounded last month when F&C’s share price plummeted more than 25% on news beleaguered Dawnay Day sold off most of its 26% stake in the fund manager.
F&C was hit with £3.99bn in outflows during the half-year period, helping to send assets under management down from £103.6bn to £96.5bn.
Profit before tax more than halved for the firm, down from £7.9m to £3.4m; while net revenue fell to £117.9m, from £119.2m.
However, the firm produced better than average UK retail figures, with net sales of £86m during the first six months. While the net sales were down 58% on H1 last year, it is a slight improvement on the 62% average industry fall.
Grisay says F&C’s ownership uncertainty, coupled with the “toughest market conditions in recent history”, has impacted on the firm.
“Markets have been dogged by fears of recession, a stream of write-downs and re-capitalisations in the banking sector and concerns over rising inflation levels. All of these factors have driven both equities and bonds lower,” he says.
“Alongside this weak market environment, on 31 January Friends Provident, our 52% shareholder, announced that wealth management was no longer core to its revised strategy and that it would seek to divest its interest in F&C.
“The uncertainty resulting from this process has constrained our ability to gather new assets.”IFAonline
Lack of innovation for solutions
Some 2,000 consumers affected
Achievements, charity work and other happy snippets
Appetite has suffered since Brexit vote
'Failure to pay attention can result in enforcement'