MSIM reports first positive long-term flows in 2 years

Morgan Stanley Investment Management on Tuesday reported $1.1 billion of net long-term inflows for the second quarter, the first time in two years flows turned positive.

An additional $9.7 billion in liquidity and overlay services flows brought total net flows for the second quarter to $10.8 billion, down from $11.5 billion in the first quarter, when liquidity inflows more than offset $2.4 billion in long-term outflows. Inflows for the year-earlier quarter came to $27.8 billion.

Sharon Yeshaya, chief financial officer of MSIM parent Morgan Stanley, said on a second-quarter earnings call that "inflows were driven by ongoing demand in alternatives and solutions, which offset outflows in equities and fixed income."

Alternatives and solutions includes products in funds of funds, real estate, infrastructure, private equity and credit strategies, and multiasset portfolios, as well as systematic strategies that create custom investment solutions, according to Morgan Stanley's latest annual report.

In particular, custom portfolios designed by Morgan Stanley's Parametric Portfolio Associates affiliate, as well as private credit and private equity remained "consistent sources of net inflows" in the latest quarter, Ms. Yeshaya said.

For the three months ended June 30, $11.4 billion of flows into alternatives and solutions more than offset roughly $5 billion of outflows apiece for MSIM's equity and fixed-income businesses.

Alternatives and solutions benefited from a significant portfolio solutions mandate, Ms. Yeshaya noted. A Morgan Stanley spokeswoman declined to provide further details about the mandate.

MSIM's total assets under management came to $1.4 trillion as of June 30, up 4% from three months earlier and up 5% from a year earlier.