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Money Management

BNY Mellon’s AUM drops 1.3% in quarter, up 8% for year

Bank of New York Mellon (BK)'s investment management and wealth management businesses reported $1.868 trillion in assets under management as of March 31, down 1.3% from the end of the last quarter but up 8.2% from a year earlier, according to parent BNY Mellon's quarterly earnings release Thursday.

Long-term net inflows totaled $4 billion in the first quarter, vs. $16 billion in the fourth quarter and $14 billion in the first three months of 2017.

Net inflows of $13 billion into liability-driven investments and $7 billion in fixed income were partially offset by net outflows of $13 billion from index investments and $3 billion from multiasset and alternative investments. Equity flows were flat in the quarter.

In the latest quarter, short-term net outflows were $14 billion vs. net outflows of $4 billion in the last three months of 2017 and net inflows of $13 billion in the first quarter of 2017. The outflows were the result of client rebalancing as well as underperformance in its European and Japanese strategies, Michael Santomassimo, chief financial officer, said in the company's earnings call.

Also, overall assets under management in the quarter were reduced because of the sale of real assets manager CenterSquare Investment Management to private equity firm Lovell Minnick Partners, he said. CenterSquare had $9 billion in AUM.

Assets under custody and administration at parent BNY Mellon were $33.5 trillion, up 1% from Dec. 31 and 9% higher than a year earlier.

Investment management and performance fees in the latest quarter were $960 million, down 0.2% from the fourth quarter but up 14% from the first quarter 2017.

Parent company revenue totaled $4.178 billion, up 12% from the fourth quarter and up 9% from the first quarter of 2017. Asset management revenue of $770 million was a 4% increase over the fourth quarter and 16% higher than the quarter ended March 31, 2017.

Net income for the parent company was $1.135 billion for the quarter, 1% higher than the quarter ended Dec. 31 and 29% higher than the first quarter 2017.

The company no longer discloses the percentage of assets under management in specific investment strategies.