A growing asset base did not save Amvescap
from reporting a loss for the fourth quarter of 2005. The London-based fund firm ended the year with $386.3 billion in assets under management, up from $382.1 billion a year earlier, but posted a $5.03 million net loss.
The loss was a reversal from earnings of $69.8 million a year ago. Amvescap, the parent company to AIM Funds and Invesco, incurred one-time pretax charge of $75.7 million. That result includes staff termination costs amounting to $45 million.
"Our restructuring actions will allow Amvescap to reduce costs by operating more efficiently and effectively," said chief executive Martin Flanagan in a statement.
Flanagan, who assumed leadership of the firm in August, said the company aims to shrink operating expenses by $120 million this year.
Amvescap witnessed the departure of some clients following regulatory allegations of improper fund trading. The firm reached a $450-million settlement with authorities in 2004.
In 2005, outflows had slowed, with clients pulling out $16.2 billion, compared to $19.5 billion in 2004. In the last quarter of 2005, net outflows reached $3.7 billion.
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