* Operating profits 101 million pounds
* Net inflows up 25 percent
* Interim dividends unchanged at 1.84 per share
* Hires new managers, plans fund expansion
(Adds details)
LONDON, July 29 (Reuters) - UK wealth management firm St James's Place posted an 11.5 percent fall in first-half operating profit on Wednesday due to weak markets, and said conditions in the industry would remain difficult.
St James's, 60 percent owned by Lloyds Banking Group, posted operating profit of 101 million pounds ($167 million), down from 114.2 million a year earlier, but ahead of an analysts' consensus forecast of 98.1 million pounds provided by the company.
"In the short term we continue to see a difficult economic climate for all wealth-management businesses," said CEO David Bellamy.
Half-yearly new business, which includes regular investments and one tenth of one-off investments, was 203 million pounds, compared with 205.7 expected by analysts and 220.7 million pounds posted in the same period last year.
In the second quarter, new business amounted to 98.4 million pounds -- a drop of 3 percent, against the 5 to 10 percent drop expected by analysts polled by Reuters.
Net inflows grew by 25 percent to 1 billion pounds, bringing assets under management to 16.9 billion pounds, versus the 17.2 billion posted in the same period last year.
The manager said it had retained over 95 percent of existing clients' funds.
It has also appointed John Wood of JO Hambro Capital Management and Peg McGetrick of Liberty Square Asset Management to manage the UK and General Unit Trust, while Stuart Mitchell of SVM Capital and Kenneth Broekaert of Burgundy Asset Management will manage our Greater European Unit Trust.
"Looking forward we are planning further expansion to complement our existing fund range both in terms of the number of managers and the types of funds. We expect these new funds to be available in 2010," it said in a statement.
Interim dividends remained unchanged at 1.84 pence per share in line with analysts' expectations. ($1=.6045 Pound) (For the Hedge Hub blog, visit: http://blogs.reuters.com/hedgehub/ For the Global Investing blog, visit: http://blogs.reuters.com/globalinvesting/) (Reporting by Cecilia Valente, editing by Will Waterman)