* Underlying pre-tax up 54 percent, ahead of forecast
* Bigger than expected 749 million pound outflows
* Interim dividend rise 19 percent
* CEO says fixed income outflows slowed in Q2
* CEO says keen on increasing dividends
* Shares up 1.66 percent
(Adds analyst comments, share price)
By Cecilia Valente
LONDON, May 3 (Reuters) - Aberdeen Asset Management posted a 54 percent rise in half-year underlying pretax profit on Tuesday on the back of better-than-expected performance fees and equity inflows.
The British-based fund manager reported underlying pretax profit for the six months to end-March of 143 million pounds ($239 million), which outpaced forecasts by analysts at the Royal Bank of Scotland by 7 percent.
During the first half, Aberdeen's equities strategies enjoyed 5.5 billion pounds net new business, while market movements, performance and forex movements added a further 3.5 billion pounds to the assets under management. It also saw positive performance in its alternative strategies and its money market range.
Performance fees, which the company charges when it outperforms a pre-set benchmark, brought in 19.1 million pounds in Aberdeen's fiscal first half, more than double the 9.4 million pound posted in the same period last year.
Aberdeen however shed 749 million pounds of client cash in the period lagging a forecast of 700 million pounds net inflows from Royal Bank of Scotland analysts, as fixed income, property, alternative and money market products suffered fresh redemptions following investors' move into riskier asset classes to tackle inflation.
Emerging market equities products also saw inflows slow down in the second quarter amid worries some markets might have reached their peak.
Aberdeen Chief Executive Martin Gilbert told journalists the company had seen a "dramatic slowdown" in net outflows from its fixed income range, to 600 million pounds at the end of the second quarter from 2 billion pounds three months earlier.
But he said global interest rate rises would likely create more volatile bond markets in the next couple of years, feeding into "significant" interest in global equity and emerging market equity strategies, into which inflows had "accelerated again" in March, Gilbert added.
SECTOR PICK
Aberdeen shares were trading 1.66 percent up at 232.8 pence by 1103 GMT after analysts at Evolution and Peel Hunt maintained their positive ratings on the stock, with the latter describing Aberdeen as "a key pick in the asset management sector".
In its note, JP Morgan Cazenove cited "particularly strong performance fees" as reasoning for its overweight rating.
Assets under management grew to 181.2 billion pounds, from 176.2 billion pounds posted at the end of February. A further 2.7 billion pounds of new mandates had been awarded but had not funded by the end of the period.
Aberdeen said it will pay an interim dividend of 3.8 pence a share, a 19 percent rise year on year, meeting market expectations ranging between 3.5 pence and 3.8 pence.
The company ended its first half with a 13.5 million pounds net cash position after repaying debt.
"We are very keen to see the dividend continue to go forward, part of the strategy is to use cash and not issue any more shares," Gilbert said, adding Aberdeen was not interested in "big, blockbuster acquisitions" and would use the cash to repay 78 million pounds of subordinated notes in July. (Editing by Mike Nesbit and Jon Loades-Carter) ($1=0.5986 pounds)