Bloomberg News

Scottish Widows Funds Managed for Outside Clients Decline 18%

February 26, 2012

Feb. 24 (Bloomberg) -- Scottish Widows Investment Partnership, Edinburgh’s second-biggest fund company, posted a decline in assets last year, with money managed for outside clients tumbling 18 percent.

The company, part of Lloyds Banking Group Plc, oversaw 139.9 billion pounds ($221 billion) on Dec. 31, down 4.3 percent from a year earlier, according to the British bank’s earnings statement released today. Assets managed for external clients, as opposed to money that came from within Lloyds, dropped by 4.9 billion pounds to 23.1 billion pounds.

Scottish Widows Investment is trying to improve the performance of stock funds to win new clients, Chief Executive Officer Dean Buckley said in an interview a year ago. His plan was to boost the external business “rapidly” and make it grow more quickly than the internal assets, Buckley said.

Money from outside clients accounted for 17 percent of total assets at the end of 2011 compared with 19 percent a year earlier, the Lloyds statement showed.

The company’s flagship equity fund, the 1.4 billion-pound Scottish Widows U.K. Growth Fund, ranked 253rd of 286 competing funds tracked by Morningstar Inc. after falling 3.2 percent in the year to yesterday versus an average gain of 1.3 percent. It ranked 277th of 296 funds in the 12 months ended Feb. 25 last year, according to previous data from the research company.

SWIP said the decline in its funds under management partly reflected the outflow of 2.7 billion pounds from a single institutional investor. “This institutional business was very low margin so whilst impacting our funds under management for 2011, it did not significantly impact our overall profitability,” said the fund manager in an e-mailed statement.

Buckley, in a separate statement, said that earnings were at a record and that Scottish Widows Investment was “well positioned to deliver on our plans for future growth and success.”

Profit before tax for 2011 was 99 million pounds, an increase of 11 million pounds, or 13 percent, on the previous year, Buckley said.

Scottish Widows Investment Partnership is part of Lloyds Banking Group which reported a wider-than-estimated full year loss today as the U.K. economy slowed.

--Editors: Tim Farrand, Peter Woodifield

To contact the reporters on this story: Rodney Jefferson at r.jefferson@bloomberg.net;

To contact the editor responsible for this story: Tim Quinson at tquinson@bloomberg.net


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