Fund managers search for rays of hope amid gloom

By Laurence Fletcher

BARCELONA (Reuters) - Fund managers meeting in Barcelona this week are facing up to a bleak outlook as markets stay volatile and inflows dry up, but one or two are seeing some opportunities as asset prices tumble.

"It's not a happy time," James Suglia, chairman of KPMG's global alternatives advisory committee, told Reuters. "The mood is relatively down."

The conference comes as investors continue to shy away from many mutual funds as the credit crisis, which began last summer, rumbles on.

Data this week from the Investment Management Association shows net retail sales of British-registered mutual funds slumped to 653.3 million pounds (653 million pounds) in May, compared with 1.1 billion pounds a year ago.

UK tax-advantaged Individual Savings Accounts (ISAs) saw their worst sales on record in the traditionally busy ISA season earlier this year.

"We (the asset management industry) are not seeing any desire for people to come back into mutual funds as yet. There is still real fear within the retail investor," said Aberdeen Asset Management (ADN.L) Chief Executive Martin Gilbert.

While some fund executives, such as Aberdeen's Gilbert, believe the credit crisis is almost over, few see a swift return to the good times, with most expecting problems to continue for some time.

"I think it's going to be a very long and drawn out affair," said Andrew Fleming, managing director and chief investment officer of Aegon Asset Management UK.