Market slump hammers Amvescap

SLIDING stock markets helped cut third-quarter profits by 31% at Amvescap, the giant Anglo-American fund manager behind the Invesco brand. Pre-tax profits fell to £110.1m from £159.4m a year earlier, before goodwill amortisation and one-off items.

'Our results...while disappointing, reflect the impact of the tragic events of 11 September and the extremely volatile market conditions existing throughout the period,' said executive chairman Charles Brady said. But he added rate cuts in the US and Europe should provide a base for economic recovery in 2002: 'We are encouraged by the recent improvements in the global market levels.'

Shares in Amvescap fell 53p to 862p following the results, which came in just below market forecasts.

Sliding markets also hit funds under management, which fell to $361.3bn (£251bn) at the end of the quarter, down 12% on a year earlier. They stood at $385bn as at 19 October.

Over the last 15 years fund managers have expanded rapidly on the back of a mostly positive market performance. But revenues across the industry have been hit as the recent market downturn has cut into funds under management and new asset flows have dried up. At the same time, costs have continued to rise.