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Money Management

BNY Mellon AUM increases 7% in quarter, falls 1% for year

BNY Mellon’s investment management and wealth management units reported $1.84 trillion in AUM as of March 31

Bank of New York Mellon (BK)'s investment management and wealth management businesses reported $1.84 trillion in assets under management as of March 31, up 7% from the three months prior but down 1% compared to a year earlier, according to parent BNY Mellon's quarterly earnings release.

Within its investment management business, flows were flat during the three months ended March 31, compared with $18 billion in net outflows during the fourth quarter and $10 billion in net outflows during the first quarter of 2018.

The 7% increase in AUM compared to the fourth quarter was primarily due to higher markets, said Mike Santomassimo, chief financial officer, during a Wednesday earnings call with analysts.

Across BNY Mellon's long-term strategies, equity products saw $4 billion in net outflows, compared with $8 billion in net outflows the prior quarter and zero net flows in the first quarter of 2018. Fixed-income strategies had $3 billion in net inflows, vs. $1 billion in net outflows during the fourth quarter and $7 billion in net inflows in the first quarter of 2018. Liability-driven investments saw $5 billion in net inflows, compared with $14 billion in net inflows during the previous quarter and $13 billion in net inflows during the year-earlier quarter.

Meanwhile, multiasset and alternative investments saw net outflows of $4 billion, vs. $2 billion in net outflows the fourth quarter and $3 billion in net outflows during the first quarter of 2018. BNY's index strategies saw $2 billion in net outflows, compared with $11 billion in net outflows for the prior quarter and $13 billion in net outflows during the year-earlier quarter.

During the first quarter, BNY's short-term cash strategies had $2 billion in net inflows, vs. $10 billion in net outflows during the fourth quarter and $14 billion in net outflows during the first quarter of 2018.

By product type, BNY reported $709 billion in liability-driven investment strategies, up 8% from Dec. 31 and up 1% from March 31, 2018. AUM in index strategies was $333 billion, up 11% from three months earlier and flat compared with year prior.

Cash strategies had $264 billion in assets, up 2% from Dec. 31 but down 7% from March 31, 2018. Assets in fixed-income strategies increased over the prior quarter and year, respectively, by 4% and 1%, to $208 billion,

Across its equity strategies, BNY reported $149 billion in assets as of March 31, up 10% from Dec. 31 but down 7% from March 31, 2018. Multiasset and alternative investments had $178 billion in assets, up 7% from three months earlier but down 4% from a year earlier.

Parent BNY Mellon's assets under custody and administration totaled $34.5 trillion as of March 31, up 4% from Dec. 31 and up 3% from March 31, 2018.

Investment management and performance fees in the first quarter were $841 million, down 5% from the fourth quarter and down 11% from the first quarter of 2018.

Parent company revenue totaled $3.9 billion, down 3% from Dec. 31 and down 7% from March 31, 2018.

Net income for the parent company was $956 million in the first quarter, up 10% from the previous quarter but down 18% from the year-earlier quarter.

On April 3, BNY Mellon announced that it was partnering with BlackRock (BLK) to deliver integrated data, technology and asset management servicing capabilities to the firm's common asset manager clients.

The move allowed BNY Mellon to integrate its data insights, accounting and asset servicing tools into BlackRock's investment and operating platform for investment managers, called Aladdin, said a news release at the time.

During the earnings call, CEO Charles Scharf said BNY Mellon is still working to expand its data and analytics capabilities beyond the BlackRock Aladdin partnership.

"The capabilities that we announced aren't the end of the road," Mr. Scharf later added. "We are continuing to build new capabilities which will be integrated. Beyond Aladdin … we believe that we should be an open platform. In fact, most asset managers use more than one (data and analytics) provider. To the extent that they want to use Aladdin, we are obviously there to support them today, but we also want to be where our clients are. There are a lot of very strong platforms out there that our clients use. You can assume that we are having lots of discussions," Mr. Scharf said.