State Street Global Advisors, BNY Mellon and Northern Trust each reported increases of at least 10% in assets under management in the fourth quarter, while Morgan Stanley and Goldman Sachs saw smaller jumps.
Among the seven large money managers that reported fourth-quarter 2008 earnings in the two weeks ended Jan. 22, only Legg Mason and J.P. Morgan Chase saw a decline in AUM for the quarter, although J.P. Morgan's assets rose from a year ago.
• SSgA, Boston, had $1.911 trillion in client assets under management as of Dec. 31, up 10% from the prior quarter and 32% from the prior year, according to parent company State Street Corp.'s earnings report.
While market rebounds contributed to those gains, Ronald E. Logue, State Street's outgoing chairman and CEO, said in a Jan. 20 conference call that SSgA also saw net client inflows of $142 billion for the latest quarter and $248 billion for all of 2009.
In the company's earnings news release, Mr. Logue said new business was focused on SSgA's passive and exchange-traded fund strategies, with the past year's momentum likely to continue.
Investment management fees contributed by SSgA to the parent company for the latest quarter came to $231 million, up 5.5% from the prior quarter and 11% from the year before.
Speaking on the conference call, Joseph L. Hooley, the parent company's president and COO who will succeed Mr. Logue on March 1, predicted the momentum State Street's asset servicing and asset management businesses enjoyed last year should continue into 2010.
• J.P. Morgan Chase & Co.'s AUM totaled $1.2 trillion, down 0.7% from the third quarter but up 10% from the previous year.
In an SEC filing on Jan. 15, the New York-based company reported net outflows of $24 billion for the quarter and net inflows of $28 billion for the 12 months ended Dec. 31.
Net income was $424 million, down 1.4% from the previous quarter but up 66% from a year earlier. Net revenue was $2.19 billion, up 5.3% from the prior quarter and up 32.4% from a year earlier.
“The (AUM) increases (for the year) were due to the effect of higher market levels and inflows in fixed-income and equity products offset partially by outflows in cash products,” according to the SEC filing. “Custody, brokerage, administration and deposit balances were $452 billion (for the year), up by $89 billion, due to the effect of higher market levels on custody and brokerage balances, and brokerage inflows in the private bank.”
• BNY Mellon, New York, reported $1.115 trillion in AUM for the company's asset management and wealth management businesses, up 15% from the prior quarter and up 20% from the previous year.
In its news release announcing the group's latest results, BNY Mellon said its acquisition during the past quarter of Insight Investment Management, a London-based money manager with $147 billion in assets under management, was a major factor driving growth in AUM.
Elsewhere, net long-term inflows of $14 billion for the quarter were more than offset by $22 billion in money market outflows.
Asset and wealth management fees for the latest quarter came to $736 million, up 13% from the prior quarter and up 5% from the year-earlier period. Those gains were partially tempered by money market outflows and higher fee waivers, reflecting the low rate environment for money market products.
“We saw excellent growth in asset and wealth management revenues this quarter, which benefited from long-term flows, the contribution from Insight Investment Management, higher equity values and stronger investment performance,” Robert P. Kelly, chairman and CEO of BNY Mellon, said in his company's earnings news release. “However, the persistent low interest-rate environment globally increasingly challenged our net interest revenue and fee revenue.”
• Goldman Sachs Group Inc.'s money management division reported client assets of $871 billion as of Dec. 31, up 2.7% from the prior quarter and up 12% from Nov. 30, 2008, before the company switched its fiscal year close to December.
In its earnings release for the latest quarter, Goldman Sachs, New York, reported net inflows of $12 billion and market appreciation of $11 billion.
Fixed-income strategies saw net inflows of $20 billion for the latest quarter, with equity strategies accounting for another $1 billion, and outflows of $8 billion in money market funds and $1 billion in alternatives.
Revenue from asset management operations for the latest quarter came to $1.125 billion, up 16% from the prior quarter and 19% higher than 13 months earlier.
• Legg Mason reported client assets of $681.6 billion, down 3% from the prior quarter and down 2.4% from the year before.
Baltimore-based Legg Mason's net client outflows picked up during the latest quarter to $33 billion, from $8 billion for the three months ended Sept. 30, more than offsetting fourth-quarter market gains of $11.6 billion.
While well below the $77 billion the money manager lost during the year-earlier quarter, the latest outflows were in the same neighborhood as the $43 billion and $30 billion in outflows seen respectively for the first two quarters of the past year.
In a conference call Jan. 21, Mark R. Fetting, Legg Mason Inc.'s chairman and CEO, said the outflows were the result of investors making asset allocation changes as the year ended to take advantage of the performance rebound enjoyed by key money management subsidiaries, such as Western Asset Management.
Fixed-income strategies experienced the bulk of the group's latest net outflows, at $24 billion, with the remainder coming from money market strategies, $5 billion, and equity strategies, $4 billion.
Legg Mason executives, speaking on the firm's conference call, noted that the bulk of investment strategies at key subsidiaries, including WAMCO and Legg Mason Capital Management, outperformed their benchmarks over the past year. While there's always a lag between a rebound in performance and investment flows, that performance pickup should help boost inflows over the coming quarters, they said.
Mr. Fetting said an industrywide move away from enhanced cash strategies over the past year contributed to WAMCO's outflows, with a long-expected loss of one $5 billion enhanced cash mandate occurring during the latest quarter. He didn't name the client. But with Western's enhanced cash strategy falling to $3 billion from $20 billion at the end of 2008, that area should become less important as a future source of outflows, executives said.
For the latest quarter, net income came to $44.9 million, down 2% from the prior quarter. The firm suffered a $1.5 billion loss for the year-earlier quarter. Revenue, meanwhile, came to $690.5 million, up 4.6% from the prior quarter but down 4.1% from the year before.
• Northern Trust Corp., Chicago, reported $627 billion in AUM, up 10.2% from three months earlier and 12.2% from the previous year. Of that, corporate and institutional assets under management totaled $482 million, up 3% from the previous quarter and 13% above last year.
Total fourth-quarter revenue was $950 million, down 17% from a year ago, chiefly because of significantly reduced foreign exchange trading compared to record levels in the fourth quarter 2008, company officials said in Northern Trust Corp.'s fourth-quarter earnings statement.
• Morgan Stanley Investment Management, New York, reported client assets of $283 billion as of Dec. 31, up 6.4% from the prior quarter but down 5.7% from the year before, according to parent Morgan Stanley's earnings statement. Figures for prior quarter assets under management were revised to reflect the planned closing this year of the sale of MSIM's mutual fund business to Invesco.
For the latest quarter, MSIM's core asset management business — equity, long-term fixed income, money market, hedge funds, hedge funds of funds and private equity funds of funds — had net inflows of $9.3 billion, rebounding from net outflows of $7.2 billion for the prior quarter and $19.5 billion for the year-earlier quarter. It was the core business' first quarter of net inflows since the second quarter of 2008.
MSIM's merchant banking business — private equity, infrastructure and real estate strategies — saw net inflows of $1 billion, a rebound from net outflows of $200 million for the prior quarter. The merchant banking division saw net inflows of $700 million for the year-earlier quarter.
For the latest quarter, net asset management revenue came to $510 million, up 14% from the prior quarter. For the year-earlier quarter, MSIM reported negative revenue of $438 million. With non-interest expenses of $565 million for the latest quarter, MSIM suffered a $55 million pretax loss from continuing operations, narrowing from a $125 million loss for the prior quarter and a $696 million loss for the year-earlier quarter.
Reporter Timothy Inklebarger and News Editor Rick Baert contributed to this story.
