State Street Global Advisors had $2.12 trillion in assets under management as of March 31, up 5.5% from the prior quarter and up 7.7% from the year before, according to a first-quarter earnings news release Tuesday by parent State Street Corp.
Assets under custody at State Street totaled $22.6 trillion in the first quarter, up 5% from the previous quarter and 19% higher than a year earlier.
In its news release, State Street attributed the jump in money management revenues to the rise in average month-end valuations for global equity markets and a positive impact from the company's acquisition of Bank of Ireland's $36 billion asset management business in January.
For the latest quarter, SSgA's passively managed AUM stood at $1.56 trillion, up 5% from the prior quarter. By asset class, passively managed equities came to $703 billion, up 7.3%; passively managed fixed income slipped to $353 billion, down 2.2% from the prior quarter; exchange-traded funds, meanwhile, edged up to $260 billion, a gain of 2%, and “other” AUM, including currency, alternatives and multiasset class solutions, came to $239 billion, up 14%.
SSgA's actively managed AUM, meanwhile, climbed 16% to $117 billion. Active equity AUM dropped 3.6% to $53 billion; actively managed fixed-income AUM rose 10% to $20 billion and actively managed “other” surged 57% to $44 billion.
Cash assets rose 5% to $446 billion.
Investment management fees for the latest quarter came to $236 million, up 6.8% from the prior quarter and up 11.8% from the year before. Those fees accounted for just over 10% of the parent company's overall revenues for the three-month period.
Also on Tuesday, BNY Mellon Asset Management reported record assets under management, excluding securities lending assets, of $1.229 trillion as of March 31, up 4.9% from the prior quarter and up 11% from the year before.
Assets under custody and administration for the quarter also set a record, at $25.5 trillion, up 2% from the end of 2010 and 14% higher than a year earlier. The yearly increase was attributed in part to the acquisitions of PNC Global Investment Servicing and Germany's BHF Asset Servicing in 2010.
The company attributed the asset management gains to both higher market valuations overall and $31 billion of net long-term flows in the first quarter of the year. Those inflows were up sharply from $9 billion for the previous quarter and $16 billion for the year-earlier quarter.
Partially offsetting those gains were $5 billion in money market outflows, which followed $6 billion of inflows for the prior quarter. There was $25 billion in money market outflows during the year-earlier quarter.
Investment management fee revenue for the latest quarter, meanwhile, came to $747 million, up 3% from the prior quarter and up 11% from the year before.
State Street Chairman, President and CEO Joseph Hooley and BNY Mellon Chairman and CEO Robert P. Kelly said their firms' foreign-exchange revenue hadn't been negatively affected by lawsuits on behalf of some public pension funds.
“We've seen stability in the revenue and, in the pricing, stability has been there as well,” Mr. Hooley said in an interview with Bloomberg News.
“We have seen very little impact from the recent scrutiny,” Mr. Kelly said Tuesdayduring a conference call with analysts. He added that litigation “is going to continue to be a risk.”
Officials from states including California and Arkansas have sued the banks, claiming they defrauded pension funds by overcharging for some foreign-exchange transactions. California is suing State Street for more than $200 million in alleged overcharges and penalties.
BNY Mellon has denied the allegations and said it will defend against the suits. State Street in October settled one suit from the state of Washington for $11.7 million. The company said contracts with the remaining plaintiffs were “significantly different” and that it will defend against those suits.
Foreign-exchange revenue at BNY Mellon was $173 million, down 1% from the same quarter a year ago. Mr. Kelly blamed the decline on diminished volatility in currencies.
State Street's forex revenue increased 19% from a year earlier “primarily due to changes in product mix,” the bank said in its earnings announcement without giving a dollar figure.
BNY Mellon and State Street raised their dividends last month and announced share buybacks after the Federal Reserve approved the measures following a review of banks' financial strength. Both cut their payouts to investors in 2009 after plunging financial markets hurt earnings.
Northern Trust reported $662 billion in assets under management in the first quarter, 7% above the previous quarter and 2% higher than a year earlier.
Net income, however, fell 3.9% to $151 million the latest quarter, compared with $157.1 million in the fourth quarter and $157.2 million in the first quarter of 2010.
Assets under custody totaled $4.4 trillion, up 1% from the fourth quarter and 17% from a year earlier.
The decline in net income was due in part to persistently low interest rates, Frederick H. Waddell, Northern Trust chairman and CEO, said in a statement.
Reporter Randy Diamond, News Editor Rick Baert and Bloomberg News contributed to this story.
