UPDATE 2-St James's Place sales jump as European debt fears ease

* Funds under management up 22 pct in 2012 to 34.8 bln stg

* Total new business up 16 pct in 2012, up 46 pct in Q4

* Partnership numbers up 8.4 pct

By Chris Vellacott

LONDON, Jan 24 (Reuters) - British investment manager StJames's Place reported a jump in fourth-quarter sales asits well-heeled customers became more confident Europe isrecovering from its sovereign debt crisis.

New business increased 46 percent from a year earlier in thelast three months of 2012, the company said in a tradingstatement on Thursday.

Chief Executive David Bellamy attributed much of the spikein sales to a mounting feel-good factor among investors asanxiety over Europe's debt crisis eased after the summer.

"The first six months of the year, there was a lot of feararound and I think at that point we were still gripped with thepossibility we could go off the edge of a cliff," he toldReuters in an interview.

"We've seen a lot more confidence ... A realism has set inand people want to make their money work."

Hopes the euro zone will emerge from a sovereign debt crisishave been lifted by the European Central Bank's pledge to defendthe euro and buy government bonds.

St James's Place sells financial products including a rangeof mutual funds it hand picks from across the fund managementindustry via a network of financial advisers.

It achieved fourth-quarter sales of 223.8 million pounds,beating a forecast by Numis Securities analysts by 27 percent.

"Most (of the increase) appears to be due to improvement inretail investors appetite for risk assets. It appears that thismomentum has continued into the start of 2013," Numis said in anote to clients.

Analysts say St James's Place shares have not realised theirfull potential because of the overhang of a 60 percent stakeheld by Lloyds Banking Group.

The state-supported bank is expected to sell some or all ofthis position in the future.

Nevertheless, investors cheered the robust business updateand shares were up more than 2 percent against a FTSE 250 indexthat had only advanced 0.1 percent by 0840 GMT.

Funds under management rose 22 percent over the year to 34.8billion pounds, lifted by recovering markets and a 3.35 billionpounds net inflow of new money, the firm said.

The company added that 2,000 staff are now fully qualifiedin a diploma required under regulation introduced this year.