UBS Global Asset Management reported 559 billion Swiss francs ($583 billion) in client assets under management as of Dec. 31, down 1% from three months earlier and 4% lower than the previous year, according to results released by parent UBS Tuesday.
The decrease in the fourth quarter was partly because of a decline in currency values that was only partially offset by an increase in market movements and net inflows of about 1 billion francs.
UBS recorded 3.8 billion francs in asset inflows largely into traditional investment strategies in the fourth quarter, with about 2.8 billion francs in outflows from the company's wealth management unit, according to the financial update. Included in the fourth-quarter inflow figures is a transfer of about 2.5 billion francs in assets from Wealth Management Americas to UBS Global AM.
In the third quarter, net inflows were negligible. For the fourth quarter 2009, net outflows totaled about 11 billion francs. UBS's net inflows totaled 1.8 billion francs for the fiscal year ended Dec. 31, 2010, the first annual net inflows recorded since 2006.
By asset class, traditional investment strategies gained 2.3 billion francs, of which about 2.1 billion francs came from passive global and Japanese equities strategies. That compares to net outflows in traditional investments of 1.5 billion francs for the previous quarter and 13.2 billion francs for the fourth quarter 2009.
Asset outflows in alternative and quantitative strategies totaled 1.5 billion francs, compared to inflows of 1.9 billion francs in the previous quarter and 900 million francs for the previous year. However, a sharp increase in performance fees in these strategies helped pushed pretax profits up by 18% to 135 million francs compared to the previous quarter. However, pretax profits were down by 52% compared to the year-earlier quarter.
Operating income was also up by about 15% to 542 million francs in the fourth quarter and also gained about 1% from 537 million francs in the year-earlier quarter. Operating expenses rose 13% in the latest quarter to 407 million francs compared to 359 million francs the previous quarter, mainly because of personnel expenses. In the quarter ended Dec. 31, 2009, operating expenses totaled about 253 million francs.