Publicly traded money managers saw their assets under management rebound in the second quarter, even as revenues were slower to recuperate from COVID-19-related drawdowns felt in the first quarter.
Of the 22 publicly traded money managers tracked by Pensions & Investments that reported by Aug. 5, all saw an increase in AUM over the first quarter. By comparison, in the first quarter, only two managers in a universe of 25 firms — Federated Hermes Inc., Pittsburgh, and Morgan Stanley Investment Management, New York — reported positive asset growth over the previous quarter.
Second-quarter asset growth ranged from 2% reported at Washington-based Carlyle Group Inc., which had $221.3 billion in AUM, to 26.7% reported at Milwaukee-based Artisan Partners Asset Management Inc., which had $120.6 billion as of June 30. Most of Artisan's $25.4 billion growth in the quarter was performance-driven, with market gains of $22.1 billion, the firm reported in its earnings release.
While AUM rebounded in the second quarter, 10 firms had positive revenue growth and 12 managers reported a decline in revenue.
"If AUM continues to bounce back, the benefit of that will be visible (via revenues) in the third quarter," said Dean Ungar, vice president, senior credit officer at Moody's Investors Service Inc., New York.
"We've seen revenues under pressure. That's not surprising because at the end of the first quarter, AUM was down a lot, more than 10% because of the market disruption (caused by) the coronavirus. We knew that the AUM starting point was going to be low," he added.
In the first quarter, aggregate assets managed by publicly traded money managers fell 10% to $24.31 trillion amid the historic market sell-off caused by the COVID-19 pandemic, P&I reported in May. The event marked the worst quarterly decline since the fourth quarter of 2008, when total assets fell 11.5%.