F&C Asset Management, the U.K. money manager being acquired by Canada's BMO Financial Group, said it faces “significant headwinds” in 2014 as withdrawals by investors crimp revenue.
Outflows from strategic investors, such as Dutch insurer Achmea, totaled £20.3 billion ($34 billion), helping to reduce assets under management by 14% to £82.1 billion as of Dec. 31, London-based F&C said in a statement Thursday. The firm's consumer and institutional businesses had £1.3 of inflows during the year.
F&C's strategic partners, which account for more than half of the firm's assets under management, are withdrawing money as their contracts mature. That will hurt revenue by about £24.3 million and F&C won't be able to cut costs to compensate for that in 2014, the statement said.
“The group faces significant headwinds in the short term as our strategic partner assets decline,” CEO Richard Wilson said in the statement. “The annualized loss of revenue associated with them remains significant.”
BMO announced Jan. 28 it was acquiring F&C in a C$1.3 billion (US$1.2 billion) deal, doubling BMO Global Asset Management's assets under management to US$269 billion.
