United Asset Management will take a non-cash charge of between $165 million and $175 million against pre-tax earnings for the fourth quarter ended Dec. 31 because two of its affiliates lost business, UAM officials announced today.
The charge will lead to an estimated loss of $1.30 to $1.40 per share in the fourth quarter. UAM's fourth-quarter report is scheduled to come out Feb. 4.
Officials said negative client cash flow for the quarter will be about $7.5 billion, and could be $16 billion for the year. UAM's assets under management were $197 billion on Dec. 31.
About 80% of the charge is attributed to Heitman Financial's acquisition of JMB Institutional Realty in late 1994. The other 20% is attributed to lost business at Newbold's Asset Management. During the fourth quarter, Newbold's was incorporated into another UAM firm, Pilgrim Baxter. Negative client cash flows experienced by other UAM subsidiaries this quarter are not included in the charge.
As of late afternoon, UAM's stock price was down more than 6%, trading at 21 7/8.
PanAgora Asset Management and DG BANK agreed to form a Frankfurt-based joint venture targeted at institutional investors.
Under a memorandum of understanding, PanAgora will develop international investment products geared toward institutions in Germany, Austria, Switzerland and Eastern Europe. DG BANK Deutsche Genossenschaftsbank will handle distribution.