Henderson, the £52.6 billion London fund manager, sparked a sell-off in its shares today after it publicly abandoned an annual profits target and admitted that its assets under management and fee income were coming under intense pressure.

Shares slumped more than 18 per cent before settling about 10 per cent lower at 82.25p after Henderson dropped its declared aim to "meet or beat" group profits of about £90 million before tax and other special costs. It had only set the target in August.

The manager, one of a string of British companies set to shift its corporate headquarters from London, gave warning that global markets had deteriorated significantly in the past six weeks.

The shares have almost halved in the past 12 months.

Henderson is one of several London fund managers to face redemption calls over recent weeks. The group acknowledged today that both retail and institutional investors had been withdrawing assets from some of its funds, although others were recording positive inflows.

A spokesman declined to be drawn on a precise fall in funds under management ahead of the firm's market update due early next month.

Henderson has gone into talks with staff, which could trigger a fresh round of redundancies. It employs 970 staff and cut 30 jobs in February.

It emerged today that Henderson's flagship hedge fund, the $660 million European Absolute Return fund, was offering investors a permanent fee cut in exchange for staying with the fund, which is down 25 per cent this year.

Henderson said that "a number of the assumptions that underpin our stated goal, and which are beyond management's control, are no longer valid, resulting in pressure on assets under management and fee income".

It added: "In the light of the prevailing market environment. we are taking actions to protect our business and profitability."

Abandoning the target marks a big setback for Henderson, whose new chief executive, Andrew Formica, is preparing to take charge next month. Roger Yates, who ran the fund manager for nine years, will be taking a nine to 12-month sabbatical.

For the year to the end of December, Henderson made pre-tax operating profits of £106.7 million. Pre-tax profits for the first half came in at £50.8 million.

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