Aviva Investors suffered a net outflow of £3.7 billion in the first half of the year.
The outflow, which reversed the net inflow of £0.5 billion in the corresponding period of the previous year, resulted in assets under management falling by around £4 billion to £347 billion.
The firm, headed by CEO Euan Munro (pictured), said that internal legacy net outflows of £2.4 billion were consistent with the previous year. However, in the first half the outflows were inflated by 'modest' withdrawals from 'internal core and external' mandates', the group noted.
Aviva Investors managed to grow its profit by 7% to £76 million over the period, while revenue rose 4% to £284 million.
Meanwhile, operating expenses increased by 3% to £208 million as the firm invested to strengthen its distribution and equities capabilities.
These costs included setting up a new base in Edinburgh, led by former Standard Life Investments chief investment officer David Cumming. In July, the firm revealed it had hired eight Standard Life Aberdeen fund managers for the new office, which has the capacity to house 60 staff.
Looking ahead, Aviva Investors said it 'remains focused on developing its distribution capability and product range to deliver long-term gains in operating profit'.
The firm's parent, Aviva, reported a 2% fall in operating profit to £1.44 billion, which it attributed to the impact of disposals and tough market conditions in Canada. It also said higher weather-related claims had impacted its business.
However, these conditions did not prevent the insurance giant from raising its interim dividend by 10%.
'The 10% increase in the interim dividend is our fourth consecutive half-year of double digit dividend growth and further proof of Aviva's progress,' Aviva chief Mark Wilson told the market.
'During these choppy market conditions, it is reassuring that Aviva's results are consistent, dependable and growing.'