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Money Management

Federated Investors’ AUM increases 5% for quarter, 16% for year

Federated Investors (FII) reported $459.9 billion in assets under management as of Dec. 31, up 5% from Sept. 30 and up 16% from a year earlier, the company said in its fourth-quarter earnings statement released Thursday.

The asset growth was attributed to the Federal Reserve raising short-term interest rates four times last year, as "Federated's wide range of liquidity products offered competitive yields for investors seeking cash-management solutions," said J. Christopher Donahue, president and CEO, in the earnings statement. Also, "Federated's money market assets increased nearly $38 billion in the fourth quarter, crossing the $300 billion threshold," Mr. Donahue added.

Money market assets totaled $301.8 billion as of Dec. 31, up 14% from both Sept. 30 and a year earlier.

Federated's equity AUM totaled $72.5 billion as of Dec. 31, down 14% from Sept. 30 but up 15% from Dec. 31, 2017.

Federated experienced equity net outflows of $2.5 billion during the fourth quarter, compared to net outflows of $1.5 billion for the third quarter and net outflows of $737 million for the fourth quarter of 2017.

The money manager's fixed-income AUM was $63.2 billion as of Dec. 31, down 3% from Sept. 30 and down 2% from Dec. 31, 2017. Fixed-income net outflows were $2.1 billion during the fourth quarter, compared to net inflows of $745 million for the third quarter. In the fourth quarter of 2017, the manager experienced fixed income net inflows of $11.2 billion.

Assets under management in alternative/private markets totaled $18.3 billion as of Dec. 31, down 2% from Sept. 30 and up 4,905% from Dec. 31, 2017. Federated began reporting the AUM and flows breakout for alternative/private markets and multiasset strategies in the third quarter, after it completed its acquisition in July of a 60% interest in Hermes Investment Management, a spokesman confirmed Friday.

Alternative/private markets net outflows were $93 million during the fourth quarter, compared to net inflows of $83 million during the third quarter and net outflows of $36 million for the fourth quarter of 2017.

Federated's multiasset AUM was $4.1 billion as of Dec. 31, down 15% from three months earlier and down 18% from a year earlier.

Multiasset net outflows were $250 million during the fourth quarter, compared to $91 million in net outflows in the third quarter. In the fourth quarter of 2017, multiasset net outflows were $145 million.

Total revenue for the fourth quarter was $307.2 million, remaining about flat from the prior quarter but up 10% from the fourth quarter of 2017. Net income for the fourth quarter was $61.5 million compared to $59.6 million during the third quarter and $131.8 million during the fourth quarter of 2017.