Morgan Stanley Investment Management reported $296 billion in assets under management as of June 30, up 7% from the prior quarter and 21% higher than the year before.
The company reported net second-quarter inflows of $15.7 billion, up from inflows of $1.4 billion for the previous quarter and year-earlier net outflows of $1.2 billion.
During a conference call Thursday, Ruth Porat, Morgan Stanley's CFO, noted that while higher market valuations lifted second-quarter revenues, an $16.5 billion rise in liquidity AUM didn't contribute much to those gains because MSIM is “waiving substantially all fees on these funds” at present to ensure positive returns for clients in a very low interest-rate environment.
After accounting for other money market flows, MSIM reported net liquidity inflows of $16.5 billion for the quarter, up from inflows of $1.6 billion for the prior quarter and $100 million for the year-earlier quarter.
Among the remaining segments of MSIM's traditional asset management business, equity strategies saw inflows of $1.4 billion, down from the prior quarter's inflows of $2 billion but reversing a net outflow of $900 million during the year-earlier quarter. Fixed-income strategies saw net outflows of $2.4 billion, compared to outflows of $600 million for the prior quarter and $1.3 billion the year before. Alternatives garnered $200 million of inflows, compared to outflows of $100 million for the prior quarter and inflows of $400 million the year before.
MSIM's real estate business saw net outflows of $100 million, following net inflows of $200 million for both the prior quarter and the year-earlier quarter.
By asset class, MSIM reported equity assets of $119 billion as of June 30, up 3% from the prior quarter and up 37% from the year before. Liquidity AUM came to $72 billion, up 31% and 44%, respectively for the same periods. Fixed-income AUM stood at $61 billion, unchanged from the prior quarter but up 3% from the year before. Assets in alternatives came to $18 billion, unchanged from the prior quarter but up 6% from the year before. The company's real estate investing AUM, meanwhile, came to $17 billion, unchanged from the prior quarter and up 13% from the year before. Its merchant banking AUM amounted to $9 billion, unchanged from the prior quarter but down 44% from the year before.
For the quarter, MSIM reported pretax operating income of $165 million, up 30% from the prior quarter. For the year-earlier quarter, the asset management arm suffered an $86 million pretax operating loss.
Revenues came to $645 million, up 3% from the prior quarter and 57% higher than the year before.