Money managers reported flat and, in many cases, declining assets under management for the quarter ended June 30.
Clients' need for cash, the continuing trend of institutional investors moving away from active equity strategies and asset owners' apprehension about Greece and China were among factors cited by asset management firms that experienced net outflows during the quarter.
Of the 16 publicly traded money managers that had released their quarterly earnings as of Aug. 4, four firms — Milwaukee-based Artisan Partners Asset Management Inc., Atlanta-based Invesco Ltd., New York-based J.P. Morgan Asset Management and Baltimore-based Legg Mason Inc. — saw assets grow by 1% or less during the second quarter. Nine firms experienced declines.
Goldman Sachs Asset Management, New York, experienced no change in asset volume.
“We didn't see a lot of appreciation,” Robert Lee, a managing director and analyst at Keefe, Bruyette & Woods Inc. in New York, told Pensions & Investments. “What we generally saw was the impact of lackluster asset returns.”
“A lot of the weak asset growth was predominantly a function of returns in the quarter being not great — depending on the asset class, of course,” Mr. Lee said.
Six managers saw net outflows during the quarter. State Street Global Advisors, Boston, had a double jolt in the quarter, with both the biggest drop (assets down 2.8%) and the largest net outflows ($65 billion) of managers that released earnings.
“Toward the end of second quarter 2015, we saw a number of significant market disruptions, which reduced risk appetite,” Joseph L. Hooley, chairman and CEO of parent State Street Corp., said during the firm's July 24 earning call.
“Our asset management business experienced net outflows of $65 billion during the second quarter of 2015, driven primarily by net outflows of $36 billion from institutional passive equity, $17 billion from ETFs, primarily institutionally oriented market index funds, and $17 billion from cash products,” Mr. Hooley added.
He noted that “the significant drivers of passive equity outflows included rebalancing and cash needs by some of (SSgA's) clients due to lower commodity prices.”