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 othe r 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.
The Senate Finance Committee's agenda this year will feature retirement issues prominently, according to Chai rman William V. Roth Jr., R-Del. Mr. Roth said in a statement that he intends to push for further expansion of IRAs by raising the $2,000 annual contribution cap, as well as hearings on how well 401(k) plans are working and an examination of proposals to reform Social Security.
