Publicly traded money managers saw modest gains in assets under management for the quarter ended Sept. 30, helped generally by rising equity markets.
BNY Mellon Asset Management, BlackRock Inc., T. Rowe Price Group Inc. and Northern Trust Corp. reported the biggest asset gains from the previous quarter, but all traditional asset managers tracked by Pensions & Investments that had reported by Oct. 25 showed AUM increases in the Sept. 30 quarter.
BNY Mellon, New York, reported $1.5 trillion in assets under management as of Sept. 30, up 7% from the second quarter and up 13% from a year ago. New York-based BlackRock's AUM of $4.1 trillion was up 6% from the previous quarter and 11.5% from a year ago. Northern Trust, Chicago, had $846 billion in assets, up 5.4% from three months earlier and 12.9% for the year-earlier quarter. T. Rowe Price Group's $647 billion in assets was a gain of 5.1% from the previous quarter and 10.9% from a year earlier.
In the quarter, the Standard & Poor's 500 stock index gained 5.25%, the Russell 1000 gained 6.02%, and the MSCI All-Country World index, ex-U.S., gained 10.23%. In comparison the Barclays Capital U.S. Aggregate Bond index posted 0.57%.
But the asset gains did not necessarily coincide with net inflows. Baltimore-based T. Rowe Price reported net outflows of $7.4 billion; the firm had $8 billion in net outflows for the quarter ended June 30.
T. Rowe Price was particularly hard hit by outflows from non-U.S. institutional investors, including sovereign wealth funds. These investors withdrew $9 billion in the third quarter after pulling out $8 billion in the previous quarter, said Brennan Hawken, equity analyst with UBS Investment Bank, New York.
“It's a total disaster,” he said, adding non-U.S. investors are responsible for 7% of the firm's AUM.
Still, the asset growth was enough to increase profits for T. Rowe Price and most other managers that experienced outflows. In the third quarter, T. Rowe Price reported $270.3 million in profits, up 9% from a year earlier.
The one exception to the increased profit picture in the third quarter was Federated Investors, Pittsburgh. The company reported net income of $37.7 million, down 32% from the second quarter and down 7% from a year earlier.
Federated Investors reported assets under management of $366.7 billion at Sept. 30, up 0.8% from three months earlier and up 0.7% from the same period a year earlier. Federated said it had $521 million in net equity outflows and $321 million in net fixed-income outflows in the quarter.
Janus Capital Group, Denver, also saw net outflows of $4.2 billion in the third quarter, the 17th straight quarter of net outflows. But again, assets overall increased because of market gains. The company reported assets of $166.7 billion, up 2.2% from the prior quarter and 7.8% from a year earlier.
Franklin Resources Inc., San Mateo, Calif., experienced net outflows of $2.9 billion in the third quarter, but market gains increased assets to $844.7 billion, up 3.6% from the previous quarter and a 12.6% gain from a year earlier.
Legg Mason Inc., Baltimore, also was in this category, reporting $1.4 billion in net outflows; the firm's equity strategies saw $4 billion in outflows.
Company CEO Joseph Sullivan said in a conference call with analysts on Oct. 25 that the equity outflows included a large global equity redemption from an institutional client at its Batterymarch Financial Management Inc. unit and $700 million in outflows from the closing of the company's Esemplia Emerging Markets unit.
Legg Mason still managed to see a small increase in AUM because of market performance in the Sept. 30 quarter, up 1.8% from the previous quarter and 0.8% from a year earlier.