F&C Asset Management, facing a shareholder rebellion to oust its chairman next month, said it will reduce its annual costs by about 7.5% by shifting back-office operations to contractors and cutting jobs.
The fund manager will save as much as £12 million ($19 million) a year by outsourcing administration functions and moving or cutting up to 110 staff, F&C said Friday in a statement. A “significant” number of the staff affected may transfer to the contractor, F&C said.
“The restructuring program will create an operational cost base that varies with assets under management and transaction levels,” F&C said in the statement. The cost savings will start in the second quarter of this year and will be “substantially achieved” by the third quarter 2012, the fund manager said.
F&C is looking to reassure investors it’s making progress with its strategy after Sherborne Investors, the firm’s biggest shareholder, requested a vote to replace Chairman Nick MacAndrew and appoint two additional board members. Sherborne, which owns 17.5% of F&C, is backed by Aviva Investors, holder of 9% of the stock.
Shareholders will vote on Sherborne’s proposals at an emergency general meeting on Feb. 3.