Weak markets in the third quarter led to a decline in appetite by investors for risk assets, which in turn led to most public money managers experiencing slumps in their assets under management.
Of the 14 public money managers whose earnings Pensions & Investments tracked as of Oct. 29, 12 saw declines in their assets under management for the quarter. The remaining two — Morgan Stanley Investment Management and Federated Investors Inc. — had AUM that stayed flat.
Also of the 14, seven experienced slumps in AUM for the year ended Sept. 30, with four — BNY Mellon Investment Management, Federated, J.P. Morgan Asset Management and BlackRock Inc., all based in New York — having no substantial change year-over-year.
JPMAM's assets under management totaled $1.71 trillion as of Sept. 30, down 4% from three months earlier and unchanged from a year before. Net outflows for the quarter were $9 billion.
“We were not immune to the impact of interest rate uncertainty in equity markets,” said Marianne Lake, chief financial officer at JPMAM parent J.P. Morgan Chase & Co., in the firm's earnings call to investors Oct. 13. “And while we did experience overall modest net outflows, we had positive flows in our less-market-sensitive multiasset class and alternative platforms.”
Denver-based Janus Capital Group, and MSIM and Goldman Sachs Asset Management, both based in New York, actually saw their AUM rise year over year in the third quarter.
Michael Kim, managing director, equity research at Sandler O'Neill & Partners LP, New York, said the market definitely created headwinds during the quarter. “We see risk appetites muted in light of ongoing uncertainty toward the macroenvironmental backdrop, and that's causing investors to sit on their hands and not make any meaningful moves as it relates to asset allocations,” Mr. Kim said.
“The public equity markets around the world had a very bad third quarter,” said Craig Siegenthaler, an analyst with Credit Suisse Group, New York, in a phone interview. “The market was the major reason that AUM balances declined in the third quarter.”
Mr. Siegenthaler added that the poor equity markets were modestly offset by positive inflows. He also cited BlackRock as a manager that “had pretty strong net flows despite such a poor macro backdrop.”