Several asset management firms have released financial reports for their most recent quarters.
cUBS Global Asset Management, Chicago, reported total assets under management of 891 billion Swiss francs ($899 billion) in the fourth quarter, a 2.8% increase from the previous year, according to Zurich-based parent UBS AG's annual report.
Total net asset outflows for the year stood at 15.7 billion francs, compared with net asset inflows of 37.2 billion francs in 2006. The report cited active management and market movements for part of the overall total increase. The 2007 total includes institutional outflows of 16.3 billion francs, partially offset by inflows of 600 million Swiss francs in the wholesale intermediary division.
Weak performance is at the root of this development, alongside the generally unsettled market environment, according to the report. Strategies that had missed their benchmarks included global equity, key core/value strategies in Europe and the U.S., and balanced funds. However, emerging markets and certain U.S. small-cap strategies beat their benchmarks. Several fixed-income strategies also had their performance significantly impaired by exposure to RMBS and CDOs as the severity of price declines in these sectors greatly outweighed the impact of other active decisions, according to the report.
cGoldman Sachs Group Inc., New York, reported assets under management of $873 billion for the quarter ended Feb. 29, an increase of 0.6% from the prior quarter and 23% higher than a year earlier, according to a company earnings statement. The increase reflected $29 billion of net inflows, offset by market depreciation of $24 billion. The inflows came primarily from money market assets, and market depreciation came primarily from equity assets.
Alternative investments totaled $148 billion, down 2% from the previous quarter and up 0.7% from 12 months ago. Equity assets totaled $214 billion, down 16% from the prior quarter and down 7% for the past 12 months. Fixed-income assets totaled $259 billion, up 1% for the quarter and up 22% for the year. Money market assets totaled $252 billion, up 22% for the quarter and 95% for the year.
cMorgan Stanley's asset management business had $577 billion under management for its fiscal first quarter, ended Feb. 29, down 3.4% from the previous quarter but 11% higher than first quarter of 2007. The unit had a pretax loss of $161 million for its first quarter. The asset management business posted gains of $294 million in last quarter and $379 million in the first quarter of 2007, according to a release from the New York-based company. Revenue from the asset management business was $543 million, 57% below the previous quarter and 60% below the year-earlier quarter. Much of the quarterly loss in revenue came from the unit's real estate business. The unit posted losses of $187 million related to securities issues by structured investment vehicles, the release said.
cLehman Brothers Holdings Inc., New York, reported assets under management of $277 billion on Feb. 29, the end of its fiscal first quarter, a 1.7% decline from the previous quarter but a 17% increase from the previous year.
The investment mix for assets under management was little changed from the prior and year-ago quarter, including $101 billion in equities, $77 billion in fixed-income, $65 billion in money markets and $34 billion in alternative investments.
Investment management saw record net revenue of $968 million in the first quarter, an increase of 16% from the previous quarter and an increase of 39% from the previous year, according to the quarterly earnings report. This performance was driven by record revenues in both asset management, which increased 49% to $618 million from $416 million in the first quarter of fiscal 2007, and private investment management, which increased 25% to $350 million from $279 million in the first quarter of fiscal 2007, according to the report.
Among other firms, Lehman Brothers, which had been rumored to have liquidity problems, reported fiscal first -quarter net income of $489 million, or 81 cents a share, down 57% from $1.15 billion in the year-ago quarter, and down 45% from $886 million in the fiscal fourth quarter.
Analyst Lauren Smith at Keefe, Bruyette & Woods said in a note to clients that market fears that Lehman may be the next Bear Stearns were overdone, in our view, although headwinds remain tough.
cFortress Investment Group, New York, posted a net loss of $60 million in 2007 and $29 million in the fourth quarter, according to the earnings statement released March 25 by the hedge and private equity fund manager. The loss was associated with the ongoing cost of the firm's reorganization, including a new compensation scheme, after going public in February 2007. Fee-paying assets under management totaled $33.2 billion as of Dec. 31, up 59% from $20.9 billion a year earlier. Fee-paying assets rose 6% in the fourth quarter from $31.2 billion as of Sept. 30.