F&C Asset Management has seen assets under management fall from £108bn to £103.2bn.

In its interim statement, released today, the firm said the third quarter from July to September had been “difficult.”

In its open-ended funds business, new outflows totalled £559m, predominantly from offshore funds held by discretionary clients.

It also saw net inflows into its UK retail business with gross sales totalling £212m, down from £224m in the previous quarter.

Edward Bramson, executive chairman of F&C, said: “The third-quarter was a difficult one for the fund management industry given the sharp sell-off in risk assets.

“However, F&C AUM strongly benefitted from the bias in our business mix towards less volatile asset classes, a characteristic that we see as a core strength of the group.”

The firm announced it would be making job cuts to meet its expense reduction target.

This target for savings has been revised upwards from £12m to £33.2m and will include £10.7m in redundancy payments.

The cuts are expected at the end of 2011 and the firm hopes the savings will be recognised in the group’s 2012 financial results.

A strategic review of the firm’s retail and wholesale investment trusts and F&C REIT will be announced in the first half of 2012.

The review will also address opportunities for the firm in the defined contribution pension market and the geographic expansion of F&C distribution in the future.