* AUM slip 2.6 pct to 95.3 mln stg due to weaker euro
* Pipeline of new institutional business at 1.9 bln sterling
(adds details, CEO comment)
LONDON, Aug 26 (Reuters) - UK fund house F&C Asset Management doubled its underlying pretax profit in the first half as a client shift into higher-margin products offset net outflows from its funds.
Total net outflows were 605 million pounds ($932.9 million), although the firm pointed to positive momentum in client sales. It cut its interim dividend as it seeks to reduce debt.
Underlying pretax profit jumped to 12.4 million pounds from 6.3 million pounds a year earlier. Assets under management slipped 2.6 percent from end-December to 95.3 billion pounds due to the weakening of the euro.
Around 55 percent of F&C's assets are denominated in euros.
F&C said it had generated 2.8 billion pounds of new business in the first half, with a further pipeline of new institutional business won but unfunded of 1.9 billion pounds. However net flows remained marginally negative in the institutional segment.
F&C Chief Executive Alain Grisay said: "This was never going to be a quick fix but we believe we are now gaining momentum."
The company said strong investment performance and positive net flows in the highest-fee client segments, its mutual funds, had supported the rise in profits. The average fee rate on the new institutional business generated in the half was also 24 percent higher than that on the institutional outflows.
"Overall net flows in the first half, while negative in AUM terms, increased annualised revenues by some 1.0 million pounds due to improved margins," it said.
It cut its interim dividend to 1 pence from 2 pence in order to reduce net debt over the medium term, it said.
The acquisition of Thames River is due to be completed on or before Sept. 1, it said. Thames River has posted net inflows of 381 million pounds in the year to date, it said. F&C shares leapt 23 percent on Aug. 17 after activist investor Sherborne,took a 5.2 percent stake, which it has subsequently increased. Shares closed at 61.75 pence on Wednesday. (Editing by Michael Shields) ($1=.6485 Pound)