Continued withdrawals of client money are behind a near £3bn fall in assets under management in the last six months, F&C says.
Assets under administration at the investment company fell to £101.3bn in the first half of the year, down from £104.1bn in December.
The Friends Provident investment management arm also announces it halved its interim dividend payout to 2p per share.
However, the firm says it has made a £7.9m pre-tax profit, up from a £29.2m loss at the corresponding point last year.
F&C attributes the improvement to a £58.5m impairment charge incurred in 2006, not repeated this year.
A spokesperson played down the drop in funds under management, citing “the decline reflected continued withdrawals of client money, with net institutional fund outflows for the period amounting to £3.3bn, while insurance clients withdrew a further £2.8bn.”
The spokesperson adds: “F&C has been hit by a trend for institutional investors to switch from using a single fund manager to spreading their assets among several specialist investment companies.”
In March, the group reported an 18% slump in full-year earnings and announced plans to cut its dividend in order to help fund a three-year recovery programme.
F&C also today halves the interim payout to shareholders to 2p per share, and says efforts to boost earnings by launching new funds that charge higher fees - including hedge funds - were on track.
The firm, led by chief executive Alain Grisay, adds it expects to acquire the asset management division of Resolution as part of the UK closed life fund consolidator's merger with Friends Provident, announced last month.
However, the tie-up between Friends and Resolution is currently under threat from Pearl Group, the privately-owned insurer led by entrepreneur Hugh Osmond.
Pearl has acquired a 16% stake in Resolution in an attempt to force it to drop the Friends deal in favour of unspecified “alternative opportunities”.
If you would like to comment on this story, contact:
020 7034 2681
Lowest level since 2016
Subset of fintech
Just one-fifth not in favour
Armed forces charity
PI providers adding constraints to cover