* Total client outflows hit 3.3 bln sterling in Q2
* Pretax loss 11.3 million sterling over first six months
* Sees 1.4 bln stg of unfunded new institutional business
* Shares fall more than 3 percent
(Adds details, CEO comments, analyst comments, peer comparison)
By Claire Milhench
LONDON, Aug 5 (Reuters) - F&C Asset Management Plc saw outflows of client money accelerate past 3 billion pounds ($5.1 billion) in the second quarter, helping the group towards a pretax loss for the first half and sending its shares lower.
The money manager fell to a pretax loss of 11.3 million pounds ($19.1 million) for the first half to the end of June, compared with a 3.4 million profit for the same period in 2008.
Its shares were 3.4 percent lower at 70.1 pence by 0901 GMT F&C, after falling to as little as 68p in early deals. Singer Capital Markets said the results looked disappointing, with net outflows more than 1 billion pounds above its forecast.
F&C Chief Executive Alain Grisay conceded the redemptions number was "quite big". Some 1.2 billion pounds of net outflows over the second quarter related to "sub-advisory" business, and 1.3 billion pounds related to insurance funds.
Institutional redemptions were a net 760 million pounds, more than three times greater than in the first three months.
Grisay said the sub-advisory outflows related to withdrawals from money market funds that had been taken in-house by clients where the alternative is to offer banking products. "When it comes to the impact on our P&L, the impact is marginal," he said.
The outflows contrasted with the performance at Standard Life Investments, which also reported on Wednesday. SLI saw third party net inflows of 3.1 billion pounds in the first half, up 17 percent on the same period in 2008. Nearly 80 percent of new net inflows came from outside the UK.
ENDORSEMENTS
F&C has previously complained that doubts over its ownership were hampering the acquisition of new business. Former parent Friends Provident Plc announced a demerger in March.
F&C is now fully independent following the disbursement of Friends Provident's 52 percent stake in July and Grisay said the medium-term outlook for F&C had "improved materially".
The company has 1.4 billion pounds of unfunded new institutional business and Grisay said he was optimistic for the future as the company now had 30 consultant endorsements, much more than it had had in years.
Cazenove said this should feed through into expectations for 2010 earnings, adding though that the complicated nature of the results may dampen enthusiasm for the stock in the shorter term.
Some 84 per cent of the decline in F&C's revenue over the first half of 2009 compared with the second half of 2008 was attributable to market and currency movements, rather than business flows or investment performance, Grisay said.
Assets under management stood at 88.3 billion pounds at end-June, down 10 percent from 98.6 billion at end-December 2008. The company said some 63 percent of the decline over this period was due to forex movements. (Editing by David Holmes) ($1=.5903 Pound)