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Money Management

OMAM’s assets fall on Heitman sale in quarter, but $9.4 billion in market gains recorded

OM Asset Management reported $235.9 billion in assets under management as of Sept. 30, down 8.8% from June 30 and up 0.7% from Sept. 30, 2016, said the company's earnings statement released Thursday.

The loss of AUM during the third quarter primarily reflects the Aug. 2 agreement to sell its stake in real estate manager Heitman to its management. That accounted for a $32.2 billion deduction in AUM. That was partially offset by $9 billion in market appreciation and $500 million in net inflows, compared to $9.4 billion in market appreciation and $300 million in net outflows during the second quarter. In the third quarter of 2016, there were $2.6 billion in net outflows.

If Heitman's AUM was included, AUM totaled $268.2 billion as of Sept. 30, a 3.6% increase over the previous quarter and 14.5% over Sept. 30, 2016."Through the disciplined execution of our growth strategy, we continue to diversify our affiliates' product offerings and global clientele," said James J. Ritchie, OMAM's chairman and interim CEO, in the earnings statement. "For example, in the third quarter we seeded a new multiasset-class strategy from which we anticipate meaningful client demand over the medium to long term once the product has developed a marketable track record; our global distribution team has had a number of sizable wins thus far in 2017, and is actively participating in a wide range of manager searches; and we met with a number of prospective affiliates during the quarter, and we continue to find that our differentiated model, which combines retained equity with a profit-sharing, partnership approach, appeals to the leaders of high-quality, active asset management boutiques."

Broken down by strategy, global equities had $121.3 billion in AUM at the end of the third quarter, up 7.4% from three months prior and up 27% from the year prior; U.S. equities had $80.5 billion in AUM as of June 30, down 1% from June 30 but up 2.5% from Sept. 30, 2016.

Alternatives, affected by the Heitman sale, had $20.7 billion in AUM, down 59.7% from the previous quarter and down 54.8% from Sept. 30, 2016. Fixed income had $13.4 billion in assets under management as of Sept. 30, up 1.5% from the previous quarter but down 6.9% from a year earlier.

Total revenue totaled $223.2 million for the quarter, up 2% from the previous quarter and up 30.7% from the year-earlier period.

GAAP net income attributable to controlling interests was $18.7 million for the third quarter, up 45% from the second quarter and down 45% from the third quarter of 2016.