Invista Real Estate Investment Management doubled profits last year, but is cautious for the year ahead.

The fund manager, which demerged from HBOS in September 2006, saw pre tax profits rise from £22.5m to £48.6m in 2007. It said that this was driven by a 54% increase in fee revenue to £67m, and a tight rein on costs.

Shares in Invista rose 5% to 63p this morning.

However, the company also said that assets under management had shrunk 6% to £8.7bn, caused by falling values and outflows from some funds.

However, Invista was cautious on the outlook for the company. ‘The outlook for the UK commercial property market remains challenging and we expect to see this trend continue in the first half of 2008, with the net result that prices may over-correct before recovering,’ chief executive Duncan Owen said.

‘In this environment, we expect some moderation in the financial performance of the business. Performance fees will be lower in 2008. Following the careful management of the cost base in 2007, which contributed to the meaningful expansion in the operating margin, we do expect to see some growth in costs during 2008.’

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