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Money Management

Franklin Resources’ AUM flat in quarter as net outflows continue

Franklin Resources reported $753.8 billion in assets under management as of Dec. 31, flat from Sept. 30 but up 5% from the same time a year prior, the company reported Tuesday in its earnings statement.

The company reported net outflows of $2.3 billion for the fourth quarter, compared to net outflows of $5.9 billion for the third quarter and net outflows of $14.4 billion for the fourth quarter of 2016.

Gregory Johnson, chairman and CEO of Franklin Resources, said in the earnings statement that the company "continued to make significant progress" on its corporate priorities, including announcing "the acquisition of (U.K.-based equity manager) Edinburgh Partners" and making "several organizational enhancements in the areas of distribution and multiasset solutions to position the firm for growth." The acquisition is expected to close in the first half of the year, adding $10 billion in AUM.

Franklin posted $1.62 billion in operating revenues for the fourth quarter of 2017, flat from the third quarter but up 4% from the fourth quarter of 2016. The company posted a net loss of $583.3 million for the quarter, vs. net income of $425.2 million in the third quarter and net income of $440.2 million for the fourth quarter of 2016.

The company's quarterly net loss included an estimated income tax charge of $1.1 billion because of the Tax Cuts and Jobs Act of 2017.

"We're excited by the options created by corporate tax reform and are currently discussing how we can best serve all stakeholders," Mr. Johnson said.

Mr. Johnson added that these options include "enhancing shareholder value via increased dividends and share repurchases, making investments that directly benefit employees and their communities, committing additional resources to further develop our financial technologies and investment data science expertise and optimizing our global distribution efforts."