Morgan Stanley Investment Management reported growth of 13.9% in assets under management or supervision to $665 billion in the quarter ended June 30.
Over the 12-month period, combined long-term and liquidity assets managed and supervised by Morgan Stanley’s institutional money management unit were up 33.8%, the firm’s earnings report released Thursday showed.
Net flows into MSIM’s long-term asset strategies, excluding liquidity funds, reached a quarterly record of $15.4 billion in the three months ended June 30, compared to $6.7 billion in the earlier quarter and $4.9 billion in the same quarter of 2019, Chairman and CEO James P. Gorman told analysts on an earnings call.
MSIM’s total net flow in the current quarter, including liquidity strategies, was $36.1 billion vs. $57.3 billion in the prior quarter and $7.9 billion in the same quarter a year earlier, according to the earnings report.
The breakdown of MSIM’s total net flow in the second quarter was liquidity strategies, $20.7 billion; equities, $9 billion; fixed income, $4.4 billion; and alternatives/other, $2 billion.
Liquid strategies also were the largest allocation within MSIM’s AUM as of June 30, up 8.5% to $268 billion in the quarter ended June 30 and up 64.4% for the year.
Equities followed with $168 billion in the current quarter, an increase of 38.3% over first quarter and 31.3% over 2019’s second quarter. Alternative investment strategies rose 2.8% to $145 billion, compared to the first quarter and up 7.4% for the quarter ended June 30, 2019. Fixed-income assets were up 12% as of June 30 from the prior quarter to $84 billion and up 18.3% from the second quarter a year earlier.
Assets managed in or supervised by MSIM in long-term assets totaled $397 billion, up 17.8% vs. the last quarter and up 18.9% for the year-earlier quarter.
“We are extremely pleased by our strong results this quarter,” said Daniel Simkowitz, managing director and head of investment management at Morgan Stanley, in an email.
“We grew long-term flows at an 18% annualized rate on the back of a record $15 billion of long-term flows (in the second quarter),” he said. “While we experienced especially strong growth in our ... active (equity strategies), we are delivering value to clients across the entire business and had positive flows in every asset category, every major geographical area and every client segment.”
Net revenue for Morgan Stanley’s institutional investment management business was $886 million, up 28% compared to the previous quarter and up 5.6% for the year.
Investment management net income was $154 million, compared to $78 million in the prior quarter and $128 million in second quarter 2019.
Morgan Stanley’s “decadelong business transformation was intended to provide stability during times of serious stress,” Chairman and CEO James P. Gorman said in news release accompanying Thursday’s earnings report.
“The second quarter tested the model and we performed exceedingly well, delivering record results,” he said. “This builds on the momentum of a very strong first quarter, while more than 90% of our employees continue to work from home, demonstrating the ongoing operational resilience of our platform.”