7 - Fund management
Our worldwide fund management operating profit decreased by 17% to £63 million (six months to 30 June 2007: £76 million) on an IFRS basis. Funds under management by Aviva at 30 June 2008 were £307 billion (31 December 2007: £316 billion) reflecting challenging global investment markets.
| 6 months 2008 £m |
6 months 20071 £m |
Full year 20071 £m |
|
|---|---|---|---|
| |||
| Aviva Investors | 49 | 58 | 123 |
| United Kingdom | (8) | (4) | (10) |
| Europe | 13 | 13 | 27 |
| Asia Pacific | 9 | 9 | 15 |
| Total | 63 | 76 | 155 |
On an EEV basis, the total operating profit from our fund management businesses was £30 million (six months to 30 June 2007: £50 million) and represents the profit from those funds managed on behalf of third parties and the Group’s non-life businesses.
Aviva Investors
On 28 February, as part of the “one Aviva, twice the value” vision, we announced our plans to combine the asset management companies within Aviva to create a single, globally integrated asset manager to be known as Aviva Investors. We have started the transition to one global business and by 30 June 2008 had moved France and Canada to join the existing Morley business.
The combined Aviva Investors businesses reported operating profit of £49 million (six months to 30 June 2007: £58 million). This decrease was primarily due to the extremely poor conditions in global financial markets.
Within this, United Kingdom reported operating profit of £28 million for the six months ended 30 June 2008 (six months to 30 June 2007: £33 million) against a backdrop of turbulent investment markets. The commercial property market in the UK remains difficult, but our global property capability continues to be a market leader and many of our funds performed well on a relative basis.
France reported an operating profit of £16 million in line with the prior period (six months to 30 June 2007: £16 million). On a local currency basis, operating profit has decreased by 13% reflecting the downturn in fund management fees income as a consequence of investment market volatility during the period.
Other fund management businesses
United Kingdom operating loss of £8 million comprises £2 million loss (six months ended 30 June 2007: £nil) from our Norwich Union retail investment business and £6 million loss (six months to 30 June 2007: £4 million loss) from our collective investment business with RBSG.
Europe operating profit of £13 million (six months to 30 June 2007: £13 million) reflected positive foreign exchange movements offset by lower fee income from funds under management, which have been affected by volatile stock markets.
Asia Pacific, comprising our Navigator business in Australia and Singapore, contributed £9 million in line with the prior period.
