5th May 2016 12:26
LONDON (Alliance News) - OM Asset Management PLC, the New York-listed boutique money manager majority-owned by Anglo-South African financial services company Old Mutual PLC, on Thursday reported a drop in first-quarter net income.
OMAM's net income amounted to USD32.0 million in the three months ended March 31, down 14% from the corresponding period a year earlier, although its assets under management rose by 2.6% over the course of the quarter to USD218.0 billion.
Net client cash flows for the quarter amounted to USD2.4 billion, yielding a positive annualised revenue impact of USD7.3 million, OMAM siad.
Old Mutual owns a 66% stake in OMAM. Old Mutual's other three divisions are made up of a 54% stake in Johannesburg-listed lender Nedbank, a wealth management arm focused on the UK, and its emerging markets business based in South Africa.
Bruce Hemphill, a former executive at African lender Standard Bank Group who became chief executive of Old Mutual in November, wants to break up Old Mutual, as he sees "limited rationale" for keeping the four different businesses under the same umbrella.
Peter Bain, president and chief executive officer of OMAM, said results were hurt by a 5.3% market-driven decline in average assets, and higher expenses amid continued investment in the business. Overall, he said, the results demonstrated the "strength and diversity" of OMAM's multi-boutique franchise, even amid market volatility seen in January and February.
"Our business model is designed to generate growth opportunities across our existing affiliates through collaborative initiatives and our global distribution platform, and we continue to make progress in both of these areas. Our affiliate management team is working with a number of affiliates on product expansion initiatives, and seed-related products were meaningful contributors to our gross inflows in the first quarter," Bain said in a statement.
"Our global distribution platform had a strong quarter, and has reached profitability ahead of schedule. In addition, we remain focused on efficient capital management and increasing shareholder value through effective capital allocation strategies," Bain said.
Shares in Old Mutual were down 0.1% at 174.93 pence Thursday.
By Samuel Agini; [email protected]; @samuelagini
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