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Money Management

Federated’s AUM up 9% in quarter on strong fixed-income inflows

Federated Investors (FII) reported $397.6 billion in assets under management as of Dec. 31, up 9% from both Sept. 30 and Dec. 31, 2016, the company said in its fourth-quarter earnings statement released Thursday.

Federated's equity assets reached $68.1 billion at Dec. 31, up 1% from Sept. 30 and up 9% from the same time a year prior. Net equity outflows totaled $903 million for the fourth quarter, compared to $700 in net outflows for the third quarter and net outflows of $938 million for the fourth quarter of 2016.

The money manager's fixed-income assets reached a record $64.2 billion as of Dec. 31, up 22% from Sept. 30 and up 25% from Dec. 31, 2016. Net fixed-income inflows totaled $11.1 billion for the quarter, vs. net outflows of $310 million for the previous quarter and net inflows of $274 million for the same quarter a year before.

J. Christopher Donahue, Federated's president and CEO, attributed the high net inflows into fixed income to "continued investor demand for a range of … fixed-income products." Federated added $11.2 billion in fixed-income separate account assets in the fourth quarter, which included "a new advisory mandate from a large public institution," according to the earnings statement.

Money market assets were $265.2 billion, up 9% from Sept. 30 and up 5% from the year-earlier period.

Total revenue for the quarter was $278.3 million, flat from the prior quarter but down 4% from the year-earlier quarter. Net income for the quarter was $131.8 million, vs. $56.4 million during the third quarter and $55.8 million during the fourth quarter of 2016.

Federated's fourth-quarter and full-year 2017 results included $70.4 million of net income resulting from the enactment of the Tax Cuts and Jobs Act of 2017, the earnings release said.