Franklin Resources on Wednesday reported assets under management of $670.3 billion as of Dec. 31, up 1.6% from the prior quarter but little changed from $670.7 billion at the close of the year-earlier quarter.
For the latest quarter, the company reported market-related gains of $27.2 billion, which more than offset net outflows of $15.6 billion, which followed net inflows of $3.1 billion for the prior quarter and net inflows of $3.2 billion for the year-earlier quarter.
According to the company's news release, an institutional client's $11.1 billion redemption was a big factor behind the latest net outflows. That client had previously taken back $12 billion during the fourth quarter of 2010.
Matt Walsh, a Franklin Resources spokesman, declined to identify the client.
That big redemption came out of a hybrid strategy, contributing to net outflows of $10.9 billion for that segment of the company's business. Franklin's global, international and domestic equity offerings, meanwhile, saw net outflows of $1.8 billion, while its taxable global/international fixed-income business reported $4 billion in net outflows. Tax-free fixed income saw net inflows of $800 million; taxable U.S. fixed income saw net inflows of $1 billion; and cash management saw net outflows of $700 million.
In his explanation of the earnings results for analysts, Franklin CEO Gregory Johnson said despite outflows from all segments of the firm's business in the latest quarter, there were signs of improvement in underlying trends. He noted that equity outflows decreased, with a fall in redemptions from U.S. and global strategies alike, as well as a number of institutional wins on the global equity side.
For the quarter, Franklin reported net income of $480.8 million, up 16% from the prior quarter but down 4% from the year before. Operating revenues, meanwhile, came to $1.7 billion, down 7.4% from the prior quarter but little changed from the year before.