Sutherland insights asset management news flash oct 31, 2014

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ASSET MANAGEMENT NEWS FLASH October 31, 2014

Table of Contents Fund Flow ............................................................................................................................. 3 Performance Reporting ......................................................................................................... 6 Strategy .............................................................................................................................. 19

2|Sutherland Insights Asset Management News Flash Oct 31, 2014

Fund Flow Hermes launches multi-asset inflation fund October 31, 2014 | Investment Week http://www.investmentweek.co.uk/investment-week/news/2378899/hermes-launches-multi-assetinflation-fund Hermes Investment Management is launching its first product for the recently launched multi-asset team headed by Tommaso Mancuso.

The Hermes Multi-Asset Inflation fund will invest in a range of inflation-related assets in an effort to achieve a return of RPI+3%, with a low tracking error to inflation and similar volatility to inflation-linked gilts.

Hermes' chief executive, Saker Nusseibeh (pictured), said: "We have established skills in manager and asset class research, quality control and due diligence combined with modelling and portfolio construction expertise.

"We believe that this, along with best in class components in many asset classes will form an integral part of our proposition."

The announcement follows a period of rapid growth for the group, which saw AUM treble over three years from £2bn to £6bn. It has already launched a number of funds in 2014, including the multistrategy credit fund.

The group has also created a new China investment team headed by Richard Williams and Mike Curry, after launching its China A-shares fund earlier in the year.

Internal promotions have also seen Andrew Parry, previously head of the European equities team, become head of the Hermes equities proposition, while Chris Taylor has become the head of private markets.

Last month, the group also hired Zoë Shaw from Promethion as head of fixed income.

3|Sutherland Insights Asset Management News Flash Oct 31, 2014

SLI closes Ignis China fund October 24, 2014 | Investment Week http://www.investmentweek.co.uk/investment-week/news/2377338/sli-closes-ignis-china-fund Standard Life Investments is closing the Ignis China fund managed by Magdalene Miller as it continues to cull the range of products acquired via its takeover of the group.

The â‚Ź36.5m (ÂŁ29m) offshore Sicav fund will be closed on 24 November 2014, with investors offered the option of rolling their investments into Standard Life's own China fund.

A Standard Life Investments spokesperson said: "The decision has been taken to close the Ignis China SICAV on 24th November 2014. This is a small fund and it is not economically viable to continue the fund at its current size.

"The existing investors in the Ignis China SICAV will be given the opportunity to transfer into the larger, comparable Standard Life China SICAV." SLI said Miller, who also runs the offshore Standard Life China Equities fund, will remain with the group.

Miller has been at Standard Life Investments since 1995 and has previously also managed the Standard Life Asian Equities and Standard Life Investments Asian Pacific Growth funds.

In September, SLI cut fund managers across 15 Ignis equity funds, handing the portfolios to its own managers following the takeover.

BlackRock to revamp strategy on Balanced Income Portfolio October 23, 2014 | Investment Week http://www.investmentweek.co.uk/investment-week/news/2377232/blackrock-to-revamp-strategyon-balanced-income-portfolio-fund BlackRock is set to overhaul the investment strategy of its Balanced Income portfolio to attract more investors as interest in the product has waned.

The fund, launched in 1994 and repositioned in 2006, has a bias towards UK equities, which the group believes has made it less attractive to investors in recent years.

The change of remit will see the UK bias removed and the allocation to equities reduced to provide investors with more diversification in the product.

4|Sutherland Insights Asset Management News Flash Oct 31, 2014

In a letter to shareholders, the group said: "In recent years, whilst the fund has delivered a consistent level of income and reasonable capital return, other funds adopting multi-asset income strategies have proved more attractive to investors and so interest in the fund has been muted.

"We believe a key reason for this has been that, unlike those other funds, the source of the fund's returns are closely linked to the UK which has restricted [its] ability to benefit from greater exposure to global assets."

Subject to shareholder approval, the fund will be renamed BlackRock Global Multi Asset Income fund on 12 January 2015, when its investment strategy will change.

The main change will see the allocation to the UK drop from 59% to 11%, while North America will make up 62% instead of the current 11%.

Equities will be reduced from 65% to 39%, with allocation to fixed income rising from 30% to 58%. The fund will be moved from the IMA Mixed Investment 40%-85% Shares sector to the 20%-60% shares sector.

M&G cuts fees on multi-asset Episode funds October 22, 2014 | Investment Week http://www.investmentweek.co.uk/investment-week/news/2376692/m-g-cuts-fees-on-multi-assetepisode-funds M&G is to cut the annual management charge (AMC) on two of its Episode multi-asset funds by 5bps next month.

The fund house is to cut the 65bps 'I' share class AMC on its ÂŁ340m Episode Balanced and ÂŁ250m Episode Income funds to 60bps as of 3 November.

Ongoing charges will also fall as a result: Episode Balanced had an ongoing charges figure (OCF) of 0.93% prior to the AMC cut, while Episode Income had an OCF of 0.86%.

At the same time M&G will also change the name of Episode Balanced, managed by Juan Nevado and Tony Finding, to M&G Episode Allocation.

The fund has returned 26.8% over the three years to 10 October, according to Morningstar, compared with an IMA Mixed Investment 20-60% Shares sector average return of 24.3%.

Episode Income, which sits in the same sector and is managed by Steven Andrew, has returned 26.9% over the period.

5|Sutherland Insights Asset Management News Flash Oct 31, 2014

Performance Reporting Legg Mason's AUM inches up in quarter, rises 8% for year October 31, 2014 | PI Online http://www.pionline.com/article/20141031/ONLINE/141039958/legg-masons-aum-inches-up-inquarter-rises-8-for-year Legg Mason (LM) reported $707.8 billion in assets under management as of Sept. 30, up 0.5% from the end of the previous quarter and up 8% from a year earlier.

The firm experienced net inflows of $13.4 billion for the quarter, compared with net outflows of $8.2 billion from the previous quarter and net outflows of $1.4 billion during the third quarter of 2013.

Liquidity strategies saw net inflows of $12.7 billion for the third quarter, compared to net outflows of $8.9 billion for the previous quarter and net inflows of $2.3 during year-earlier quarter, the company said in its latest quarterly statement.

Long-term strategies saw inflows of $700 million for the quarter ended Sept. 30. These were offset by negative market performance and foreign exchange of $9.9 billion.

Equity inflows were $1.6 billion for the quarter ended Sept. 30 vs. net outflows of $1.8 billion for the quarter ended June 30 and net outflows of $4 billion during the quarter ended Sept. 30, 2013, while fixed-income outflows were $900 million, compared to net inflows of $2.5 billion for the previous quarter and net inflows of $300 million for the year-earlier quarter.

Fixed income represented 51% of Legg Mason's AUM as of Sept. 30, while equity represented 27%.

Liquidity represented 22%.

Revenue for the quarter was $703.9 million, up 1% from the previous quarter and up 5% from the same quarter a year ago. Net income, meanwhile, was $4.9 million for the quarter ended Sept. 30, down 93% from the quarter ended June 30 and down 94% from the quarter ended Sept. 30, 2013.

The decline in net income is attributable to a $107.1 million charge related to debt refinancing initiated in the prior quarter and finalized in July.

“During the period, we completed a transaction refinancing our debt at current historically low rates while meaningfully laddering out our maturities,” said Legg Mason President and CEO Joseph Sullivan in the firm's earnings statement released Friday. “While this restructuring impacted the current quarter, the resulting decrease in our run-rate interest expense and enhanced financial flexibility will benefit shareholders over the long-term.”

6|Sutherland Insights Asset Management News Flash Oct 31, 2014

Fortress Investment sees 14% rise in AUM for year ended Sept. 30 October 30, 2014 | PI Online http://www.pionline.com/article/20141030/ONLINE/141039996/fortress-investment-sees-14-rise-inaum-for-year-ended-sept-30 Fortress Investment Group’s assets under management rose to $66 billion as of Sept. 30, up 3.4% from three months earlier and up 14% from a year earlier, the alternative investment firm reported Thursday.

The increase included $2.2 billion in net inflows for Logan Circle Partners, the firm’s traditional money management unit; $900 million in invested capital; $700 million in raised capital directly added to AUM; and $400 million in investment gains.

Offsetting those increases were $1.2 billion in capital distributions to investors, $600 million in liquid hedge fund redemptions and $200 million in payments to credit hedge funds investors due to capital account redemptions.

Private equity accounted for 21.5% of total AUM, followed by credit funds at 20% and liquid hedge funds, 11.4%.

The Drawbridge Special Opportunities Fund, the firm’s flagship credit hedge fund, had a net return of 1.8% for the third quarter, while the Fortress Asia Macro Funds and Fortress Macro Fund returned a net 1.5% and 1.1%, respectively.

Meanwhile, private equity fund valuations increased 3.2% in the third quarter compared to a 2.8% gain in the second quarter.

Fortress Investment Group, which in 2007 became the first publicly traded private equity and hedge fund manager in the U.S. and has since declined 61%, would consider going private, its chief executive officer said.

“When the opportunity presents itself, we’ll definitely think about that,” CEO Randy Nardone said in response to an analyst’s question on a conference call Thursday discussing third-quarter earnings. “It’s obviously something that, at these valuations, it does seem like a pretty good value. It is something we think about as we think about many things going forward.”

7|Sutherland Insights Asset Management News Flash Oct 31, 2014

Invesco's AUM down 1.6% in quarter, up 5.9% for year October 30, 2014 | PI Online http://www.pionline.com/article/20141030/ONLINE/141039990/invescos-aum-down-16-in-quarterup-59-for-year Invesco (IVZ) on Thursday reported assets under management of $789.6 billion as of Sept. 30, down 1.6% from the end of the previous quarter but up 5.9% from a year earlier.

Net inflows in the third quarter were $2 billion, compared with net outflows of $8.8 billion in the previous quarter and net inflows of $9.1 billion in the third quarter of 2013.

Long-term active investment strategies saw net inflows of $6 billion, compared to net outflows of $6.9 billion in the second quarter and net inflows of $5 billion in the third quarter of 2013.

Long-term passive strategies were flat in the quarter ended Sept. 30, compared with net inflows of $1.1 billion in the previous quarter and net inflows of $200 million in the third quarter of 2013.

Invesco's PowerShares exchange-traded funds business saw net outflows of $3.2 billion vs. net outflows of $3 billion in the previous quarter and net inflows of $800 million in the quarter ended Sept. 30, 2013.

Invesco (IVZ)'s money-market business saw net outflows of $800 million in the most recent quarter, compared to net inflows of $1.1 billion last quarter and net inflows of $3.3 billion during 2013's third quarter.

Revenue came to $913.7 million for the third quarter, up 1.4% from the second quarter and up 11.9% from the same quarter a year prior.

Net income in the latest quarter, meanwhile, was $218.5 million, down 1.6% from the previous quarter but up 14.4% from the year-earlier period.

Oaktree Capital posts 2.3% AUM gain in quarter October 30, 2014 | PI Online http://www.pionline.com/article/20141030/ONLINE/141039988/oaktree-capital-posts-23-aum-gainin-quarter Oaktree Capital Group’s assets under management rose to $93.2 billion for the quarter ended Sept. 30, up 2.3% from the second quarter of 2014 and up 16.8% from Sept. 30, 2013, said Oaktree’s quarterly report released Thursday.

8|Sutherland Insights Asset Management News Flash Oct 31, 2014

Management-fee-generating assets under management reached a record high of $79.1 billion for the third quarter, up 1.7% from June 30 and up 18.2% from a year ago.

GAAP net income was $18.9 million for the third quarter, down from $42.9 million in the quarter ended Sept. 30, 2013.

Management fees rose to $194.5 million for the third quarter, up from $185.6 million from the yearearlier quarter, despite a $30.8 million decline in fees attributable to closed-end funds in liquidation and retroactive fees from the close of Oaktree Real Estate Opportunities Fund VI in the third quarter of 2013.

Offsetting the decline was an aggregate increase of $39.7 million in fees from the start of Oaktree Real Estate Opportunities Fund IX’s investment period on Jan. 1; net inflows and market-value gains in openend funds; the acquisition of infrastructure manager Highland Capital; and closed-end and evergreen funds for which management fees are based on drawn capital.

During the same period, incentive and investment income decreased. Incentive income, which is based on profits, fell to $86.3 million for the third quarter, down from $122.4 million in the year-earlier quarter.

The firm reported a loss of $2.4 million in investment income, down from income of $53.6 million in the third quarter of 2013.

Apollo Global assets up 45.4% for year; income drops significantly October 30, 2014 | PI Online http://www.pionline.com/article/20141030/ONLINE/141039995/apollo-global-assets-up-454-foryear-income-drops-significantly Apollo Global Management reported assets under management of $163.9 billion as of Sept. 30, down 2.1% from three months earlier and up 45.4% from a year earlier, the company reported Thursday in its third-quarter earnings statement.

The year-to-year increase in AUM was attributed to the growth in Apollo's credit and private equity business.

Credit AUM totaled $107.7 billion, nearly double the $59.4 billion from a year earlier, while private equity AUM totaled $46.2 billion, up 7.9% from 12 months earlier and real estate AUM totaled $9 billion, down 3.2% from the previous year.

U.S. GAAP net income was $2.2 million for the third quarter, compared to $192.5 million for the third quarter of 2013.

9|Sutherland Insights Asset Management News Flash Oct 31, 2014

Total gross carried interest in the third quarter was a $57 million loss. In the third quarter of 2013, carried interest income totaled $952 million.

Gross management fees rose to $207.3 million for the quarter ended Sept. 30, up 37.2% from the yearearlier quarter.

Advisory and transaction fees from affiliates, net of limited partner rebates, rose to $71.1 million, up 145% from the same period a year ago. Gross advisory and transaction fees were not available by press time.

Franklin Resources AUM down 2.4% in quarter as profit rises 11% October 27, 2014 | PI Online http://www.pionline.com/article/20141027/ONLINE/141029881/franklin-resources-aum-down-24-inquarter-as-profit-rises-11 Franklin Resources on Monday reported $898 billion in assets under management as of Sept. 30, down 2.4% from three months earlier but up 6.3% from a year earlier.

Net outflows for the quarter were $100 million, compared to net inflows of $2.6 billion for the quarter ended June 30 and net outflows of $2.7 billion for the same quarter a year ago.

The quarterly decrease of $22.5 billion in AUM was due primarily to market depreciation and the impact of foreign-exchange revaluation, said the company's quarterly earnings report. The company had a yearover-year AUM increase of $53.3 billion, despite $4.6 billion in net outflows during the 12-month period.

Total equity AUM at Sept. 30 was $371 billion, down 4% from June 30 but up 9% from Sept. 30, 2013.

Fixed-income assets totaled $361 billion, down 1% from June 30 and flat from a year earlier.

Hybrid strategy assets totaled $159 billion, down 2% from three months earlier but up 16% from 12 months earlier. Cash totaled $7 billion, a 9% rise from the end of the second quarter and up 6% from the previous year.

Franklin's net income was $640.6 million in the quarter ended Sept. 30, up 11% from the prior quarter and up 26% from the year-earlier quarter.

Revenue, meanwhile, was $2.16 billion in the three months ended June 30, up 1% from the previous quarter and up 9% from the same period a year earlier.

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SSgA's assets down 2.4% in quarter, up 8% for year October 24, 2014 | PI Online http://www.pionline.com/article/20141024/ONLINE/141029903/ssgas-assets-down-24-in-quarterup-8-for-year State Street Global Advisors had $2.421 trillion in assets under management as of Sept. 30, down 2.4% from three months earlier but up 8% from a year ago, said parent company State Street Corp. (STT)'s earnings announcement Friday.

Equities reached $1.411 trillion in assets as of Sept. 30, down 1.5% from June 30 but up 11% from Sept.

30, 2013. Fixed-income AUM was $338 billion, down 4% from three months earlier but up 2% from a year earlier.

Cash, meanwhile, was $410 billion, down 1% from June 30 but up 6.2% from Sept. 30, 2013. Multiassetclass solutions reached $138 billion, down 8% from three months ago but up 8% from a year ago.

Alternatives were $124 billion, down 7% from three months prior and down 2.4% from 12 months before.

SSgA's investment management fees totaled $316 million for the quarter ended Sept. 30, up 5.3% from the previous quarter and up 14.5% from the year-earlier quarter.

Total assets under custody and administration were $28.47 trillion, up 0.2% from June 30 and up 9.3% from Sept. 30, 2013.

State Street's Corp. reported revenue of $2.58 billion in the third quarter, down 1% from the second quarter but up 6% from the third quarter of 2013.

State Street's net income, meanwhile, was $542 million for the latest quarter, compared to $602 million in the previous quarter and $531 million in the year-ago quarter.

Federated Investors reports slight AUM gain in quarter October 24, 2014 | PI Online http://www.pionline.com/article/20141023/ONLINE/141029907/federated-investors-reports-slightaum-gain-in-quarter Federated Investors (FII) reported $352.3 billion in assets under management as of Sept. 30, a 0.2% increase from the previous quarter but down 3.9% from the previous year.

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Federated’s total equity assets as of Sept. 30 set a record for the company at $50.3 billion, up 0.8% from the previous quarter, also a record, and up 24.8% from the previous year, said its third-quarter earnings report released Thursday.

For the quarter, equity net inflows of $1.6 billion were able to make up market losses totaling $1.2 billion. In the second quarter, equity market gains and reinvestments totaled $2.5 billion, while net inflows accounted for $1.5 billion.

Fixed-income assets as of Sept. 30 totaled $51.2 billion, up 0.1% from the previous quarter, and a 0.2% increase from the previous year.

Net fixed-income inflows totaled $233 million, just making up for fixed-income market losses for the quarter of $176 million. In the second quarter, fixed-income market gains and reinvestments totaled $630 million, while net outflows totaled $775 million.

Money market assets in both mutual funds and separate accounts totaled $245.5 billion as of Sept. 30, up 0.1% from the previous quarter and down 9.2% from the previous year.

Liquidation portfolio assets were $5.2 billion at the end of the third quarter, down 0.4% from the previous quarter and down 16.1% from the previous year.

Total revenue for the third quarter was $216.92 million, up 1.9% from the previous quarter and up 2.4% from the same period in 2013. Net income for the third quarter also saw a slight increase from the previous quarter, up 1.9% to $37.56 million. Compared to the same period last year, net income dropped slightly, by 0.4%.

T. Rowe Price's AUM dips 1% in last 3 months October 23, 2014 | PI Online http://www.pionline.com/article/20141023/ONLINE/141029921/t-rowe-prices-aum-dips-1-in-last-3months T. Rowe Price Group on Thursday reported $731.2 billion in assets under management as of Sept. 30, down 1% from three months earlier but up 13% from a year earlier.

Net inflows during the third quarter were $200 million, compared to net outflows of $200 million in the previous quarter. T. Rowe reported net inflows of $1.1 billion into the firm's mutual funds and net outflows of $900 million from its other investment portfolios.

Mutual fund assets were $466.4 billion as of Sept. 30, also down 1% from June 30 but up 15.5% from Sept. 30, 2013.

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As of Sept. 30, $142.4 billion of AUM was in T. Rowe Price's target-date portfolios, of which $122.5 billion was in target-date funds and $19.9 billion was in target-date trusts. The total target-date AUM was up 1.3% from three months earlier and 30% higher than a year earlier.

Net income for the quarter came to $303.6 million, 1% lower than the previous quarter and 12% higher than the third quarter of 2013. Net revenue, meanwhile, totaled $1.02 billion, up 3.6% from June 30 and up 15% from Sept. 30, 2013.

AllianceBernstein reports 1.5% AUM drop in quarter despite institutional inflows October 23, 2014 | PI Online http://www.pionline.com/article/20141023/ONLINE/141029920/alliancebernstein-reports-15-aumdrop-in-quarter-despite-institutional-inflows AllianceBernstein (AB) reported $473 billion in assets under management as of Sept. 30, a 1.5% decrease from the previous quarter but a 6.2% increase from a year earlier.

“During the third quarter, market conditions became increasingly challenging as investors began to focus on the Fed’s intention to continue removing liquidity and eventually raise rates, as well as growing evidence that slowing growth in Europe was weakening overall global growth,” said Peter S. Kraus, AllianceBernstein chairman and CEO, in a conference call to investors Thursday. “These dynamics spooked investors into shedding risk assets.”

Institutional assets under management totaled $236.8 billion, while retail AUM was $162 billion and private client AUM totaled $74.2 billion, AllianceBernstein's third-quarter earnings release said.

Institutional AUM decreased 1.5% from the previous quarter, when the manager reported $240.3 billion.

Total net inflows for the quarter were $2.8 billion.

Institutional inflows totaled $2.8 billion. The previous quarter, the manager had reported total inflows of $8.3 billion and institutional inflows of $6.8 billion.

Net retail outflows, meanwhile, were $100 million for the third quarter, while net inflows for private clients were $100 million. In the previous quarter, retail inflows were $2 billion, while outflows for private clients had been $500 million.

Net revenue for the third quarter totaled $750 million, down 1% from the previous quarter and up 6% from the third quarter of 2013.

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AllianceBernstein's third-quarter net income totaled $139.8 million, up 2.5% from the prior quarter and up 40% from the third quarter of 2013.

Northern Trust AUM dips for quarter, rises 9.1% for year October 22, 2014 | PI Online http://www.pionline.com/article/20141022/ONLINE/141029953/northern-trust-aum-dips-forquarter-rises-91-for-year Northern Trust Corp. reported total assets under management of $923.3 billion as of Sept. 30, a 0.1% decrease from three months earlier but up 9.1% from a year earlier, said its third-quarter earnings release Wednesday.

Corporate and institutional assets under management totaled $702.9 billion at the end of the third quarter, up 0.2% from June 30, and up 10.8% from the previous year.

The bank's corporate and institutional assets under custody, meanwhile, dropped slightly to $5.403 trillion as of Sept. 30, down 1.5% from the previous quarter but rose 13.4% from a year earlier.

“Our financial performance in the third quarter of 2014 reflects continued growth in our business serving personal and institutional clients,” said Frederick H. Waddell, chairman and CEO of Northern Trust, in a news release. “Trust, investment and other servicing fees, which represent two-thirds of our revenue, increased 11% compared to last year. New business and higher equity markets contributed to strong growth in assets under custody and under management, which increased 13% and 9%, respectively,” year-over-year.

BNY Mellon reports $1.65 trillion in AUM on strong LDI inflows October 17, 2014 | PI Online http://www.pionline.com/article/20141017/ONLINE/141019882/bny-mellon-reports-165-trillion-inaum-on-strong-ldi-inflows/A Bank of New York Mellon (BK) reported $1.646 trillion in combined assets under management for its BNY Mellon Investment Management and wealth management businesses as of Sept. 30, up 1% from three months earlier and 7% higher than a year ago, the company reported in its earnings statement Friday.

“We achieved continued momentum in investment management as we saw strong fee growth,” BNY Mellon CEO Gerald Hassell said in a conference call with investors and analysts. He added that “AUM increased to a new record driven by net new business.”

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Long-term net inflows totaled $13 billion: $18 billion in net inflows to liability-driven investments, some of which was offset by net outflows of $3 billion from index funds and net outflows of $2 billion from equities. Short-term (or cash) net inflows totaled $19 billion.

For the previous quarter, long-term net outflows totaled $13 billion and short-term outflows, $18 billion; in the year-earlier quarter, long-term inflows totaled $32 billion and short-term inflows, $13 billion.

Investment management and performance fees during the third quarter of 2014 were $881 million, flat from the previous quarter and up 7% from the year-earlier period. The year-over-year increase reflects higher equity markets, the impact of a weaker U.S. dollar and higher performance fees, the earnings statement said.

Parent Bank of New York Mellon reported $28.3 trillion in assets under custody and administration as of Sept. 30, flat from June 30 but up 3% from Sept. 30, 2013.

Parent company revenue came to $4.61 billion for the second quarter, up 23% from the previous quarter and up 22% from the same period a year ago.

Net income for the parent company, meanwhile, came to $1.07 billion for the latest quarter, compared with $554 million in net income in the second quarter and $962 million in the year-earlier quarter.

Morgan Stanley's AUM inches up in quarter; revenue, income falls October 17, 2014 | PI Online http://www.pionline.com/article/20141017/ONLINE/141019883/morgan-stanleys-aum-inches-up-inquarter-revenue-income-falls/A Morgan Stanley (MS) Investment Management reported $398 billion in assets under management as of Sept. 30, up 0.5% from June 30 and up 11% from a year earlier, parent company Morgan Stanley's earnings statement revealed Friday.

The annual increase in AUM was attributed primarily to market appreciation and positive flows.

Net inflows totaled $7.6 billion for the quarter ended Sept. 30, the same as the previous quarter and up from the net inflows of $1.8 billion in the third quarter of 2013.

By asset class, net inflows of $4.9 billion went to liquidity strategies; $4.5 billion, fixed income; $500 million, merchant banking; and $300 million each to alternatives and real estate. Equities saw net outflows of $2.9 billion during the quarter ended Sept. 30.

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Morgan Stanley also reported that $143 billion of AUM was in equities at the end of the third quarter, down 5% from the end of the second quarter. Liquidity strategies had $126 billion in assets, up 4%; fixed income, $65 billion and up 5%; alternatives, $35 billion, unchanged from the prior quarter; real estate, $20 billion, also unchanged; and merchant banking, $9 billion, up 13%.

Net revenue for MSIM totaled $655 million in the third quarter, down 5% from the previous quarter and down 21% from the year-earlier quarter.

Investment management net income totaled $120 million in the quarter ended Sept. 30, down 13% from the previous quarter and down 16% from the year-earlier quarter.

Vanguard to merge FTSE tracker funds October 16, 2014 | FT Adviser http://www.ftadviser.com/2014/10/16/investments/etfs-and-trackers/vanguard-to-merge-ftsetracker-funds-KGmNnCoKkbMIY0btpMqQFM/article.html Vanguard is planning to merge the £1.5bn Vanguard FTSE UK Equity fund with the £1.6bn Vanguard FTSE UK All Share Index Trust to lower costs.

The merger, which is subject to shareholder approval, is due to take place on November 1.

The FTSE UK Equity fund was originally designed to target retail investors, while the unit trust was targeted at institutional investors.

In a letter to shareholders, Vanguard said: “As our experience in the UK market hs grown it has become apparent that the Unit Trust can meet the needs of both types of investor.”

Vanguard said the merger could lower costs due to the extra scale of the combined fund.

A spokesperson for Vanguard said: “The merger will also achieve certain economies of scale through the elimination of expenses duplicated across the two funds and potentially lower transaction costs for investors.”

All costs and expenses relating to the merger will be paid by Vanguard and there will be no costs to investors.

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GSAM's assets, revenue flat from prior quarter; AUM up 15% for the year October 16, 2014 | PI Online http://www.pionline.com/article/20141016/ONLINE/141019906/gsams-assets-revenue-flat-fromprior-quarter-aum-up-15-for-the-year Goldman Sachs reported $1.008 trillion in assets under management for its Goldman Sachs Asset Management and wealth management businesses as of Sept. 30, flat from three months earlier but up 15% from a year earlier, according to its third-quarter earnings statement issued Thursday.

Total assets under supervision for GSAM, which includes other client assets as well as AUM, reached $1.15 trillion as of June 30, up 1% from June 30 and up 16% from Sept. 30, 2013.

Total assets under supervision net inflows for the quarter were $20 billion. Of that, $7 billion each was equities and liquidity strategies, and $6 billion was fixed income.

By asset class, Goldman Sachs reported $517 billion in fixed-income AUS as of Sept. 30, flat from June 30; $255 billion in liquidity strategies, up 3%; $232 billion in equities, unchanged from three months prior; and $146 billion in alternative investments, down 1%.

Net revenues in investment management were $1.46 billion for the third quarter, essentially unchanged compared with the second quarter of 2014, but 20% higher than the third quarter of 2013.

Investment management and other fees were $1.21 billion for the quarter ended Sept. 30, up 1% from the previous quarter and up 12% from the year-earlier quarter.

BlackRock's AUM down 2% in quarter; fixed income leads inflows October 15, 2014 | PI Online http://www.pionline.com/article/20141015/ONLINE/141019926/blackrocks-aum-down-2-in-quarterfixed-income-leads-inflows BlackRock (BLK)'s assets under management totaled $4.525 trillion as of Sept. 30, down 2% from three months earlier but up 10% from a year ago, said an earnings statement released Wednesday.

The drop reflected a 24% quarterly decrease in advisory AUM to $23.2 billion due to the disposition of some portfolio liquidations. Net inflows to BlackRock's long-term strategies were about $28.7 billion for the latest quarter, reflecting inflows of $11.11 billion in fixed income, $10.23 billion to equities, $7.42 billion into multiasset strategies and net outflows of $80 million from core alternatives.

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BlackRock's iShares business saw long-term net inflows of $18.2 billion, followed by its institutional business with $5.62 billion in net inflows and retail, $4.86 billion. “We saw strong interest in our global unconstrained fixed-income platform in the third quarter, raising more than $4 billion of net new flows in our Strategic Income Opportunities and Fixed Income Global Opportunities funds, collectively, and that momentum has continued into the fourth quarter,� said Laurence D. Fink, BlackRock chairman and CEO, in the statement.

Assets in BlackRock (BLK)'s institutional business as of Sept. 30 were $2.72 trillion, down 2% from June 30. Meanwhile, assets in the firm's iShares ETF business totaled $974.17 billion, also down 2% from three months earlier. Retail assets in the quarter were $525.48 billion, another 2% decrease from June 30.

The asset management giant reported revenue of $2.85 billion in the third quarter, up 3% from the previous quarter and up 15% from the third quarter of 2013. Net income was $917 million, up 13% from the three months ended June 30 and up 26% from the year-earlier period.

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Strategy BNY Mellon to expand Asia wealth management business October 27, 2014 | Asia Asset Management http://www.asiaasset.com/news/BNY_Mellon_to_expand_Asia_wealth_management_business2710. aspx BNY Mellon has received regulatory approval via its Hong Kong branch for the launch of a major investment and wealth management initiative in the territory.

The firm said that this will involve a wide range of solution-based services including strategic asset allocation, access to investment management services from its multi-boutique structure, as well as active and personalised client discretionary portfolio management.

The launch will see BNY Mellon expand its wealth management presence in Asia-Pacific, which serves local families and US citizens. The firm believes it can stand out from competitors by “taking a longer and broader view of serving clients” overall wealth and investment planning needs”.

Larry Hughes, chief executive officer at BNY Mellon Wealth Management, said: “Our expansion provides greater access to comprehensive wealth and investment planning services to the high-net worth market.”

“With the broad and deep capabilities of one of the world’s leading investments companies, BNY Mellon offers holistic, solutions-based wealth management. Our focus on discretionary investment management, rather than transactional services, is integral to our comprehensive approach and differentiates us in the market,” he continued.

Alan Harden, chief executive officer at BNY Mellon Investment Management, Asia-Pacific, said that it would continue to focus on its core businesses of investment management and services in the region.

“Expanding on-the-ground wealth management services is a prime example of this long-term commitment to the region. BNY Mellon is leveraging the trend of unprecedented wealth growth rates in the Asia-Pacific region by drawing from our broad global expertise to deliver wealth and investment planning solutions locally,” he said.

As of the end of September, BNY Mellon had $28.3 trillion in assets under custody or administration, and $1.6 trillion in AUM.

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Old Mutual to Acquire British Wealth Manager for $936.6 Million October 17, 2014 | DealBook http://dealbook.nytimes.com/2014/10/17/old-mutual-acquires-british-wealth-manager-for-936million/?_php=true&_type=blogs&module=BlogPostTitle&version=Blog%20Main&contentCollection=Mergers%20&%20Acquisitions&action=Click&pgtype =Blogs&region=Body&_r=1 The insurer Old Mutual said Friday that it had agreed to acquire Quilter Cheviot, the private equitybacked British wealth manager, in a deal worth up to 585 million pounds, or about $936.6 million.

The acquisition of Quilter Cheviot is expected to bolster Old Mutual Wealth, the insurer’s wealth management division. The combined unit would have about £92 billion in funds under management after the transaction.

Quilter & Company was acquired by the private equity firm Bridgepoint Capital in 2011 from Morgan Stanley and later combined with Cheviot.

As part of the transaction, Old Mutual would pay up to £585 million, a significant portion of which would be used to satisfy outstanding debt and other nonoperating liabilities of Quilter Cheviot.

A portion of the consideration, about £42 million, would be paid in restricted shares to the company’s management shareholders. The equity would be paid on a deferred basis and contingent on business performance.

“We have made considerable progress in the execution of our stated strategy this year as we increase the pace of change in the organization,” Julian Roberts, the Old Mutual chief executive, said in a news release. “The acquisition of Quilter Cheviot delivers the final substantive part of our investment program in the U.K. toward building a vertically integrated wealth management business of scale in the U.K.” The acquisition comes after Old Mutual spun off its United States-based asset management arm, OM Asset Management, in an initial public offering this month.

The transaction requires regulatory approval. It is expected to be completed in the first quarter of 2015 and to generate annual cost savings of about £15 million by 2017.

The client base of Quilter Cheviot, which traces its heritage back to 1771, includes high-net-worth private clients, trusts, charities and pension funds. It had funds under management of about £16.2 billion at the end of September.

Founded in South Africa in 1845, Old Mutual offers insurance, asset management and banking services to about 16 million customers worldwide. It had £300.5 billion in funds under management as of June 30 and employs about 56,000 people worldwide.

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Bank of America Merrill Lynch, Pakenham Partners and Rothschild advised Old Mutual, while Evercore Partners and the law firms Linklaters and Shearman & Sterling advised Bridgepoint.

Citigroup to exit consumer banking business in 11 countries October 15, 2014 | BBR http://retailbanking.banking-business-review.com/news/citigroup-to-exit-consumer-bankingbusiness-in-11-countries-151014-4404901 Citigroup is closing consumer banking businesses in 11 countries in order to focus on markets with high growth potential, simplify operations and boost profits.

The bank will shut down its businesses in Costa Rica, Czech Republic, Egypt, El Salvador, Guam, Guatemala, Hungary, Japan, Nicaragua, Panama and Peru, and consumer finance business in Korea.

After the closure, the group's Global Consumer Banking (GCB) division will serve around 57 million clients in 24 markets.

Citigroup CEO Michael Corbat said: "I am committed to simplifying our company and allocating our finite resources to where we can generate the best returns for our shareholders.

"While we have made progress optimizing these 11 consumer markets, we believe our Global Consumer Bank will achieve stronger performance by focusing on the countries where our scale and network provide a competitive advantage."

This is the second time that Citi has announced to exit consumer business from markets with low returns since Corbat took over as CEO two years ago.

Previously, it announced to cut 11,000 jobs and exit consumer banking business in Spain, Greece and Turkey, reported Bloomberg.

GCB CEO and Citigroup co-president Manuel Medina-Mora said: "Today's actions are the next step in the execution of our strategy to build an urban-based, globally integrated consumer bank.

"Since 2009, the Global Consumer Bank has become more streamlined, efficient and profitable. Focusing our presence in 100 cities across both the U.S. and top emerging markets where we have the greatest scale and growth potential, positions us to win."

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