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Money Management

State Street Global Advisors’ AUM down for quarter, year

State Street Global Advisors had $2.511 trillion in assets under management as of Dec. 31, down 10.6% from three months earlier and 9.7% lower than a year earlier, according to parent State Street Corp. (STT)'s earnings release Friday.

SSGA experienced total net outflows of $47 billion in the fourth quarter, compared to net inflows of $8 billion the previous quarter and net inflows of $6 billion in the fourth quarter of 2017.

By asset class, alternatives were the only category with net inflows of $1 billion in the most recent quarter. Net outflows in the fourth quarter were reported as follows: cash, $30 billion; equity, $11 billion; fixed income, $5 billion; and multiasset strategies, $2 billion.

SSGA's long-term institutional strategies all experienced net outflows, totaling $13 billion in the fourth quarter. Net outflows from equity were $6 billion; fixed income, $4 billion; multiasset, $2 billion; and alternatives, $1 billion.

Equities managed by SSGA were $1.544 trillion as of Dec. 31, down 13.7% from Sept. 30 and down 11.5% from Dec. 31, 2017.

Fixed income accounted for $422 billion, down 0.2% from three months earlier but up 1.9% from a year earlier.

In SSGA's other asset classes, multiasset strategies totaled $132 billion at the end of the latest quarter, down 9% from the end of the previous quarter and down 10.2% from the fourth quarter 2017; alternative investments, $126 billion, down 7.4% from three months earlier and down 13.7% from 12 months earlier; and cash, $287 billion, down 9.5% and 13%, respectively.

Assets under custody and administration were $31.62 trillion, down 7% from Sept. 30 and 4.5% less than Dec. 31, 2017.

SSGA's investment management fees totaled $440 million in the fourth quarter, down 7.2% from the previous quarter but up 5.3% from the year-earlier quarter.

State Street Corp. (STT) reported total revenue of $2.986 billion for the quarter, up 1.2% from the third quarter and up 4.9% from the fourth quarter of 2017. The corporation's net income was $398 million, down 43.9% from the previous quarter but up 19.2% from the year-earlier quarter.

During an earnings conference call Friday, Ronald P. O'Hanley, who assumed the role of State Street Corp.'s president and CEO this month, said he has spent the past year engaging with investors, clients, employees and regulators and re-examining the company's investment management and investment servicing strategies.

Mr. O'Hanley outlined five medium-term priorities for the company: achieve servicing fee growth, develop a diversified revenue stream; deploy the company's front-to-back office platform; achieve cost savings of 2% to 3% annually through structural changes, including a 15% reduction of senior managers across the company; and create a high-performing, leaner organization with increased accountability.

In a statement, State Street said overall it was dismissing 1,500 employees, or about 6% of the workforce in high cost locations. The company had more than 39,000 employees as of Sept 30.

Mr. O'Hanley did not provide specifics about how the changes at the corporate level will affect SSGA, but he did note, "We are adapting investment management to meet client needs."

"SSGA is not where we want it to be," he said on the call, but he noted the investment management unit did see good growth in exchange-traded funds, investment outsourcing and multiasset strategies in the fourth quarter.

Bloomberg contributed to this report.