UK fund manager Henderson's profits rise 13 pct, Q4 inflows weaken

* Underlying pre-tax profit up 13 pct

* Assets under management, net inflows at record highs

* European equity strategies helped performance

* But net inflows lower in Q4

* May look at M&A, in Australia, U.S., Asia (Adds share price, analyst quote, further CEO comments)

By Carolyn Cohn

LONDON, Feb 25 (Reuters) - A strong performance in European equity strategies helped to push asset manager Henderson's underlying profit up 13 percent in 2014, the company said on Wednesday, and assets under management hit record highs.

But weaker net inflows in the fourth quarter led some analysts to question whether the performance was sustainable.

The 80-year old money manager said it gained market share last year in European equities. European stocks rose four percent last year and are up nearly 13 percent this year, as money-printing by the European Central Bank keeps borrowing rates low.

"We are six years into a bull market in equities," Henderson chief executive Andrew Formica told reporters on a conference call, adding that in Europe negative bond yields were encouraging people to move into shares.

Net inflows also had a record year at 7.1 billion pounds, but fourth quarter inflows were below average, at 700 million pounds, due to some U.S. institutional clients cashing in parts of their portfolio.

Henderson's shares, which have outperformed peers with a rise of 23 percent this year, inched up 0.1 percent to 264 pence, slightly underperforming European financial services .

Analysts at Jefferies noted that quarterly inflows had become progressively smaller last year.

"The three-year record remains good, the one-year is more indifferent," they said in a note, rating the stock at "underperform" and adding that one-year performance was "the best indicator as to the future three-year track record".

Henderson bought fund managers New Star and Gartmore in the past few years, and added U.S. equity manager Geneva Capital Management last year. The Geneva acquisition led to the unexpected fourth quarter institutional outflows, it said.

Formica told reporters that the firm would focus on organic growth, but would also look at M&A opportunities, with targets likely to be in Australia, the United States or Asia, rather than Britain or Europe.

Underlying pretax profit from continuing operations rose to 187.8 million pounds ($291.2 million), against expectations for 180.6 million, according to a poll provided by the company.

Assets under management at Dec (Shanghai: 600875.SS - news) 31, 2014, rose 8 percent to a record high 81.2 billion pounds, compared with 80.6 billion pounds forecast.

Henderson said it would pay a final dividend of 6.4 pence per share and a total dividend of 9 pence. ($1 = 0.6450 pounds) (Editing by Keith Weir)