* Total assets rise 7 pct to 328 bln pounds
* GARS fund sees first quarterly outflow
* Company looks to bring down cost base (Adds CEO comment, analyst comment, detail from statement,share reaction)
By Simon Jessop
LONDON, Aug 9 (Reuters) - British insurer and asset managerStandard Life weathered a tough market environment topost forecast-beating asset growth and profits in the first sixmonths of the year, sending its shares almost five percenthigher.
Money managers have faced heightened market volatility sofar this year, with many suffering mutual fund outflows asretail investors were spooked by events including Britain's voteto leave the European Union in June.
Standard Life's flagship 26 billion pounds ($33.83 billion)Global Absolute Return Strategies Fund (GARS) fund saw quarterlyoutflows for the first time ever in the three months includingthe June 23 referendum date.
Barclays analyst Alan Devlin noted that flows remainedpositive over the half-year at 600 million pounds, albeitsharply below the figure of 5.6 billion a year earlier.
"The company indicated institutional flows were stickierthan wholesale flows. The key will be if the performance of GARScan stabilize and hence flows stabilize," he wrote in a note.
Total assets under administration rose 7 percent to 328billion pounds, however, up from 307.4 billion pounds atend-December, helped by 19.7 billion pounds in market gains assterling weakened and bond yields dropped after the Brexit vote.
The growth in total assets exceeded a 313.9 billion poundconsensus forecast of 16 analysts provided by the company andhelped the firm's underlying operating performance rise 14percent over the period.
Operating pretax profits, meanwhile, rose 18 percent to 341million pounds, underpinning a 7.5 percent increase in itsinterim dividend to 6.47 pence a share.
The performance sent shares in Standard Life up 4.6 percentto 333.1 pence by 0855 GMT, the second-biggest gainer on theFTSE 100.
By contrast, shares in Legal & General fell almostsix percent to 205.4 pence after lower profits in its investmentmanagement and general insurance businesses took the shine offan overall 10 percent rise in first-half operating profit.
Looking ahead, Standard Life Chief Executive Keith Skeochsaid the firm would make further savings to drive significantimprovements in its cost-to-income ratio.
The ratio was 62 percent during the period, a slightimprovement on the 63 percent recorded in the full-year 2015,but the company said it aimed to lower it significantly, andtake it below 60 percent "in the not too distant future".
"We're well aware the market and economic background is abit more challenging in 2016 than it was in 2015, and it'simportant that we cut our cloth to suit," Skeoch said. ($1 = 0.7702 pounds) (Additional reporting by Vikram Subhedar; editing by SineadCruise/Keith Weir)
