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29 April 2008 - Johanna Symmons

St James's Place reports rise in new business

Wealth manager St James's Place for the first quarter reported a 1% rise in new business on the back of gains in pension revenue, while overall it showed net investment returns of -£1.4bn.

New business in the three months to the end of March amounted to £98.7m (€125.2m), compared to £97.8m the previous year, the company said in a statement. This result beat analysts' consensus estimate, which predicted a 2.4% fall in first-quarter sales, said chairman Mike Wilson.

"Despite challenging market conditions, new business is ahead of the same period last year, which was itself up 41% on the previous year," Wilson said.

The wealth manager, which sells life insurance, pensions and investments, reported new pensions business worth £43.5m for the first quarter of 2008, an 8% increase on the first quarter of last year. However, first-quarter investment bond and unit trust sales were down 4% at £50.7m and new insurance business was also down at £4.5m, compared to £4.8m in the first quarter last year.

Wilson said pension investments are long-term investments and therefore less dependent on stock market conditions. They also benefit from tax relief.

The wealth manager's overall net investment returns for the first quarter of the year were -£1.4bn; total funds under management decreased 5% to £17.2bn from January 1 to March 31, 2008. The MSCI World index dropped approximately 10% over the same time period, according to Bloomberg.

Wilson said: "Clearly we would have had more growth in the first quarter if [market] conditions had been better." He declined to disclose growth targets for 2008, but added: "We are confident that we will increase our market share in the current year and our new business target remains 15% to 20% over the longer term."

According to Bloomberg, insurer Aviva has forecast growth in the UK life insurance market will be between 0% and 5% this year as house prices decline and taxation changes make investment bonds less attractive.

Tags: Results , UK

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