Franklin Resources reported assets under management of $733.3 billion as of Sept. 30, flat from June 30 and down 5% from Sept. 30, 2015, as net outflows continued to plague the company, according to its financial statement released Wednesday.
Franklin had $22.1 billion in net outflows in the quarter, vs. $19.2 billion in net outflows in the previous quarter and $28.6 billion in net outflows in the year-over-year quarter.
For the fiscal year ended Sept. 30, the firm had $86.5 billion in net outflows. In fiscal 2015, net outflows totaled $48.8 billion.
Franklin reported net income of $472.1 million in the quarter, up 6% from the previous quarter and up 32% from the year-earlier quarter. Operating revenue of $1.6 billion for the quarter was down 1% from the quarter ended June 30 and down 14% from the quarter ended Sept. 30, 2015.
During a conference call with analysts, company officials expressed optimism that assets flows would improve, saying performance had gotten better in key strategies and that institutional investors are looking for new fixed-income opportunities.
“What we’re seeing in the U.S. is a re-risking of portfolios,” said Thomas Regner, Franklin’s head of U.S. advisory services, during the conference call. “If you look at the public pension plans, they are severely underfunded. They need higher returns. So, they’re starting to look at portfolios or asset classes that provide a high risk-adjusted returns. So, I think that speaks well for some of the capabilities that we have on a global basis in fixed income.”