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Money Managers

OMAM’s assets up 4% for quarter despite outflows

OM Asset Management reported $258.8 billion in assets under management as of June 30, an increase of 3.6% from March 31 and up 18.3% from June 30, 2016, said the company's earnings statement released Thursday.

The company attributed its quarterly growth to market appreciation of $9.4 billion.

For the quarter ended June 30, OMAM's net outflows totaled $300 million, compared to net outflows of $2.5 billion for the quarter ended March 31, and net outflows of $2.9 billion for the three months ended June 30, 2016.

"OMAM's results for the second quarter reflect an enhanced operating and market environment as well as the successful execution of our growth strategy," said James J. Ritchie, OMAM's chairman and interim CEO in the firm's earnings statement.

On OMAM's separation from parent company Old Mutual PLC, Mr. Ritchie added: "Old Mutual made substantial progress in its managed separation process during the quarter, as it completed the sale of 9.95% of OMAM shares to HNA Capital and sold 19.895 million shares in an underwritten public offering and an additional 5 million shares to OMAM through a repurchase agreement."

Also as part of the separation, OMAM entered into an agreement to sell its share of Heitman LLC to certain executives of the firm.

"As a result of this process, yesterday the company executed a non-binding term sheet reflecting an agreement to sell our interest in Heitman LLC for $110 million in cash," said Mr. Ritchie. "Heitman represents 12% of OMAM's AUM at June 30 and contributed 3% of (economic net income) in the first half of 2017."

Mr. Ritchie assumed the role of chairman and interim CEO after former president, CEO and director Peter Bain left the company June 30.

Broken down by strategy, global equities had $112.9 billion in AUM at the end of the second quarter, up 7.3% from three months prior and up 26.9% from the year prior; U.S. equities had $81.3 billion in AUM as of June 30, down 1% from March 31 but up 3.4% from June 30, 2016.

Alternatives, meanwhile, had $51.4 billion in assets, up 4.5% from March 31 and up 39.3% from June 30, 2016. Fixed income had $13.2 billion in assets as of June 30, flat from three months prior but down 7.7% from a year earlier.

Total revenue totaled $218.8 million for the quarter, up 11.5% from the previous quarter and up 40% from the year-earlier period.

Net income attributable to controlling interests was $12.9 million for the first quarter, down 39.7% from the first quarter and down 64.5% from the second quarter of 2016.