T. Rowe Price sees AUM drop 11.2% for quarter, 2.9% for year

T. Rowe Price Group reported assets under management of $962.3 billion as of Dec. 31, down 11.2% from three months earlier and down 2.9% from a year earlier, according to a news release Wednesday on the firm's quarterly earnings.

Net outflows for the fourth quarter were $8.4 billion, compared to net inflows of $2.7 billion in the third quarter. In the fourth quarter of 2017, the firm reported net inflows of $3.7 billion.

By asset class, equity strategies experienced the highest net outflows of $7.3 billion during the fourth quarter, compared to net outflows of $700 million in the third quarter and net outflows of $900 million in the fourth quarter of 2017.

Fixed-income strategies and money market funds, which are combined in the report, had $1.4 billion in net outflows in the fourth quarter vs. net inflows of $1 billion during the previous quarter.

Multiasset net inflows were $300 million in the fourth quarter compared to $2.4 billion in net inflows in the third quarter.

By investment vehicle, T. Rowe Price U.S. mutual funds had net outflows of $10.9 billion, for which client transfers contributed $3.7 billion in outflows. Subadvised and separate accounts had net outflows of $2 billion, which included $200 million in inflows from client transfers. Other investment products had $4.5 billion in net inflows.

The firm's net revenue in the fourth quarter was $1.305 billion, down 6.5% from the previous quarter and up 0.6% from the year-earlier quarter. Net income in the fourth quarter was $351.9 million, a 39.6% decrease from the third quarter, but a 1.4% increase from the fourth quarter of 2017.

"For the fourth quarter, increases in average AUM, revenues, and earnings per share were more muted, as steep equity declines drove our AUM lower, particularly in December," said William J. Stromberg, the company's president and CEO, in a news release accompanying the earning's report.

"Amidst the increased market volatility, we were pleased with our relative investment performance vs. our peers and continued strong gross sales momentum in the fourth quarter. Nonetheless, we realized net outflows due to elevated market volatility-driven redemptions, similar to broad industry net cash flow trends," Mr. Stromberg added.