LONDON (Reuters) - UK-based fund manager Ashmore Group (>> Ashmore Group plc) posted an above-forecast 32 percent rise in first-half core profits on Thursday, following strong investment returns in emerging markets and sending its shares to the top of the FTSE mid-cap index <0#.FTMC>.

The firm, which specialises in emerging markets, has suffered outflows in recent years due to volatility in the asset class, but the trend has been changing in the past 18 months.

Assets under management fell slightly in the six months to the end of December, to $52.2 billion (42 billion pounds) from $52.6 billion, affected by uncertainty over emerging markets following the U.S. election. Assets under management rose 5 percent over the whole of 2016, however, as emerging stocks <.MSCIEF> rallied.

"The flows pattern has picked up again pretty quickly since (the U.S. election) and momentum is building quite nicely," Finance Director Tom Shippey told Reuters.

"The flows story is very much intact looking forward to 2017."

Revenues rose 24 percent in the first half to 144.1 million pounds ($180.27 million), compared with 128.9 million seen in a company-supplied poll.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) were 89.7 million pounds, against a forecast 77.3 million pounds.

Ashmore said it would pay an interim dividend of 4.55 pence per share, unchanged from a year earlier.

Analysts at KBW reiterated their "market perform" rating on the stock, describing the results as "strong".

Ashmore's share price was up 3.8 percent at 331 pence by 0856 GMT, off an earlier high of 338.5p.

Investors have been focusing on the possibility of more consolidation in the asset management industry, following UK-based Henderson Group's (>> Henderson Group Plc) $6 billion deal to acquire U.S. firm Janus Capital (>> Janus Capital Group Inc) in October.

"We have an organic growth strategy that we are executing on. We think there is plenty of opportunity," Shippey said.

"It's possible there might be little bits of 'in-fill' M&A."

(Editing by Simon Jessop and Greg Mahlich)

By Carolyn Cohn