BrightSphere Investment sees AUM rise 1.5% for quarter

BrightSphere Investment Group reported $237.7 billion in assets under management as of Sept. 30, up 1.5% from June 30 and 0.8% higher than a year earlier, said the company's earnings statement released Thursday.

BrightSphere had net outflows of $2.6 billion in the third quarter, vs. net outflows of $4.1 billion in the second quarter and net outflows of $500 million for the year-earlier quarter.

In its earnings release, BrightSphere attributed the third-quarter outflows to U.S. equity subadviser withdrawals and client rebalancing.

The quarterly outflows were more than offset by $6 billion in market appreciation.

Stephen Belgrad, president and CEO, said in a conference call Thursday that the increase in market appreciation in the quarter put BrightSphere "back performing in line with what we want to achieve."

While Mr. Belgrad said BrightSphere would like to add alternative credit and real estate strategies to its overall offerings, "the price for these private managers is significantly higher that what public managers are trading at today. In that environment, while we'll continue to look at acquisitions, we need to turn the dial down a bit."

By asset class, all as of Sept. 30, BrightSphere had $76 billion in U.S. equity, up 6.1% from June 30 but down 5.5% from the end of the third quarter 2017; global and international equity had a combined $124.7 billion in assets, up 1.9% from three months earlier and 2.8% higher than a year ago; fixed income had $13.2 billion, down 4.3% from June 30 and down 1.5% from Sept. 30, 2017; and alternatives had $23.8 billion, up 1.7% from the end of the second quarter and up 15% year over year.

Management fee revenue totaled $229.6 million, up 1.4% for the quarter and up 3.6% for the year.

Revenue on a U.S. GAAP basis was $230.1 million for the quarter ended Sept. 30, down 1.6% from the previous quarter but up 3.1% from the year-earlier period. Net income was $54 million, vs. $2.1 million in the previous quarter and $18.7 million for the third quarter 2017.