Gartmore's fund management performance was "slightly below the industry median" last year, but the company still gained new business worth a net £1.9bn.
The pension fund specialist increased pre-tax profits by 29 per cent to £35.3m for the year to December 1994.
Gartmore remains the fourth- largest manager of segregated pension fund assets in the UK. Paul Myners, executive chairman, said its funds had outperformed the industry's index over three and five years.
Gartmore is paying a final dividend of 3.75p, giving a total of 5.5p. In August 1994 it paid an interim of 1.75p, the first payment following the company's flotation. Banque Indosuez owns 75 per cent of the group.
Despite the net increase in funds under management, the value of total funds fell from £21bn to £20.8bn, largely because of the decline in world markets.
Gartmore has been appointed investment manager to the new life insurance and unit trust subsidiaries of Halifax and Leeds Permanent building societies. Mr Myners said this was the company's first step into the retail "bancassurance" sector.
Other areas of future expansion were the US, through its link with Nations Bank, Europe and the Middle East.
"We have achieved critical mass in the UK but have hit a glass ceiling as far as market share is concerned. Over the next five years we will have a major push to widen our customer base outside the UK," Mr Myners said.
He said customers were increasingly concerned with investment performance, and were setting fund managers specific goals. Gartmore was responding by taking more people on and added 47 last year, taking its head count to 466.
Overall costs rose by 22 per cent to £52.3m, and Mr Myners warned that investments in new areas would drive up costs in 1995 and constrain profits.
The Barings debacle has not produced a flight of funds from its asset management arm, Mr Myners said. "There have been one or two inquiries from Barings clients but nothing like the avalanche some had expected."