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Money Management

Public managers see AUM rise in Q3 but operating margins fall — SS&C analysis

Assets under management for 18 publicly traded money management firms analyzed by SS&C Technologies Holdings rose 2.4% in the third quarter, to a combined $12.961 trillion.

However, operating margins for those firms fell in the quarter by an average 30 basis points to 32.7%, according to the SS&C Asset Manager Composite.

"Ultimately, it was solid market performance in Q3 that was able to more than compensate for an acceleration in net outflows for the composite group, resulting in a solid recovery in cumulative AUM," said Matthew Fronczke, director, strategic business consulting in the SS&C research, analytics and consulting group, said in a news release. "The big unknown is how capital markets finish the fourth quarter, which have been turbulent so far."

The increase in AUM for the quarter boosted fee revenues among the 18 firms by an average 30 basis points and overall revenues by 50 basis points, according to SS&C. However, overall operating expenses for the firms rose by an average 70 basis points, accounting for the decline in composite operating margins.

Net outflows in the third quarter were a combined $32.4 billion vs. net outflows of $11.9 billion in the previous quarter.

The firms reviewed by SS&C were Affiliated Managers Group, AllianceBernstein (AB), Artisan Partners (APAM) Asset Management, BlackRock (BLK), Cohen & Steers Capital Management (CNS), Diamond Hill Investment Group, Federated Investors (FII), Franklin Resources, GAMCO Investors (GBL), Invesco (IVZ), Janus Henderson Group, Legg Mason (LM), Manning & Napier, Pzena Investment Management, SEI Investments (SEIC), T. Rowe Price Group, Victory Capital Management and Waddell & Reed Asset Management (WDR) Group (WDR).