Sculptor Capital Management's assets under management totaled $33.4 billion as of March 31, down 3.2% from three months earlier but up 3.4% from a year earlier, the firm's earnings report released Wednesday showed.
The $1.1 billion decline in assets was primarily due to performance-related losses of $1.6 billion, partially offset by net inflows of $555 million, and $54 million of distributions.
In contrast, Sculptor attracted $2.1 billion in net inflows in the previous quarter together with $664 million of performance gains and $322 million in distributions. In the year-earlier quarter, the firm had net outflows of $923 million, cushioned by $873 million of performance gains and distributions of $155 million.
In the earnings release, Sculptor's executive team attributed a large portion of the firm's AUM decline in the first quarter to $801 million of performance losses in the firm's opportunistic credit funds, which had net outflows of $279 million. Assets under management in the opportunistic credit fund family declined 18.3% to $4.9 billion compared with Dec. 31 and were down 15.5% for the year.
Robert S. Shafir, Sculptor's CEO, told analysts during Wednesday's earnings call that the firm's opportunistic credit funds were hit hard by losses in corporate and structured credit investments resulting from the impact of the COVID-19 pandemic during the first quarter, particularly in the month of March.
The Sculptor Credit Opportunities Master Fund, for example, declined a net 20% in the first quarter, Mr. Shafir said.
However, Mr. Shafir said he's optimistic that Sculptor's opportunistic credit funds will "recover over time" from market-related mispricing of the underlying investments.
He added that "we continue to see great opportunities for us, especially in structured credit," and noted that the firm is in "active dialogues with investors" regarding opportunistic credit investments.