F&C cautious after a leap

Fund management house F&C has been buoyed by the rising stock market but isn't sure the good times are on the way back.

Since June F&C's assets have added more than 12% to £99 billion, a gain that will see a knock-on effect on its fees and commissions.

Today it warned that the bounceback could be short lived.

"The underlying economic environment remains challenging," it said. "We remain cautious in our outlook given the speed and extent of the market recovery."

F&C has had only a few months as an independent outfit. It was previously majority owned by Friends Provident, the insurer that has been taken over by Resolution. Friends distributed its 52% stake in F&C to its own investors, massively increasing F&C's shareholder base.

F&C still manages Friends Provident assets on a long-term contract.

Most of F&C's funds, £60 billion worth, are in fixed interest. It says it "sees an improvement in risk appetite from some clients".

Chief executive Alain Grisay said: "Over the quarter our assets under management have benefited strongly from a combination of higher market levels and favourable currency movements.

"Against an improving market backdrop, we have also made further progress with investment consultants, none of whom now have F&C on a corporate hold' or sell' view."

F&C took in £456 million of fresh funds from institutions during the quarter.