A “wall of cash” is expected to pour back into investment markets once investor confidence improves, a leading fund manager says.

Global concerns in particular had caused a drop in market activity, BT Investment Management chief executive Emilio Gonzalez said.

“I think the last three to four months has been a step backwards in terms of investors coming back into the market,” Mr Gonzalez told analysts on Monday.

“Their concern over the debt situation in Europe, and with interest rates where they are, they’ve been more than happy to continue to invest and be defensive in terms of their portfolios.”

No financial guidance was provided by the firm, but Mr Gonzalez said market activity would increase once stability was achieved.

“We really need a period of market stability for investor sentiment to improve,” he said. “There is a wall of cash sitting there but we do need that confidence to return.

“It will take time for that confidence to come around.”

Decreased market activity contributed a relatively steady performance by BT, which is owned by Westpac Banking Corporation, in the year to September 30.

Costs associated with BT’s recent purchase of London-based investment manager JO Hambro Capital Management (JOHCM) were the main reason for a 23 per cent drop in annual profit to $16.9 million.

Cash profit, which takes out one-off costs related to the JOHCM acquisition, was $30.5 million, down slightly from $30.9 million in the same period last year.

Mr Gonzalez said BT’s performance was sound, given the volatility of markets.

Revenue in the year to September 30 was down two per cent from the previous corresponding period to $126.6 million.

BT’s average funds under management were $35.1 billion at September 30, down from $35.3 billion a year earlier.

BT declared a fully franked final dividend of 10 cents per share.

Its shares were down one cent at $2.03 at 1528 AEDT Monday.