Extending the run of good earnings from fund managers such as T. Rowe Price (NASDAQ:TROW), Amvescap (NYSE:AVZ) reported respectable first-quarter earnings last week.

The U.K.-based asset management firm and Income Investor recommendation posted a 14.8% increase in net revenue and a 27.1% jump in operating profit from a year ago, reflecting higher margins and positive net fund flows. Comparing figures on a sequential basis to the prior quarter, net revenues grew 2.4% and operating profit declined 5.2%. Assets under management grew to a record $471.2 billion, up 14.7% from a year ago and 1.9% from the prior quarter.

A closer look at Amvescap's figures reveals continuing room for improvement on the retail side. Despite a well-established presence in the U.S. market through its AIM and Invesco finds, investment performance remains unimpressive. Gross inflows and outflows essentially negated each other, producing a wash. Redemptions from a limited number of large private wealth management accounts also proved disappointing. Meanwhile, overall demand for institutional products remained firm, and gross sales were the strongest since the second quarter of 2000.

There's no doubt that competition among asset managers is cutthroat. The recent headlines about some portfolio managers talking leave for Deutsche Bank highlights the intense fight for both assets and talent in this arena. Amvescap is a top-notch global player with the capacity to capture more market share. As CEO Martin Flanagan acknowledged on the earnings conference call, "More work needs to be done, but the momentum continues."

Amvescap is a Motley Fool Income Investor recommendation. Find more dividend superstars with a free 30-day trial of James Early's low-risk, high-reward newsletter service.

Fool contributor S.J. Caplan does not own shares of the companies discussed in this article. The Fool has a disclosure policy.