4th Feb 2016 13:49
LONDON (Alliance News) - OM Asset Management PLC, which is majority-owned by Old Mutual PLC, on Thursday said its fourth-quarter net income fell 22% year on year, while also asking shareholders to approve a USD150 million share repurchase program.
In a statement, the New York-listed asset manager said economic net income amounted to USD36.5 million in the three months ended December 31. Across the 12 months to that stage, economic net income totalled USD149.7 million when excluding extraordinary performance fees, and USD161.1 million when including them, down 1.1% and up 6.5%, respectively, compared to the 2014 period.
"While a USD22.7 million decrease in quarterly performance fee revenue led to a decline in economic net income for the fourth quarter, our management fee rate increased by over two basis points as we saw gross flows into higher margin products," Peter Bain, president and chief executive officer of OMAM, said.
Assets under management were USD212.4 billion at the end of December, down 3.8% from the end of 2014.
OM Asset Management saw net client cash outflows of USD3.2 billion in the quarter, primarily due to outflows in the US equity sub-advisory channel, sovereign wealth fund withdrawals, and higher-than-usual hard asset disposals, with an annualised revenue hit of USD6.6 million. That took full-year net client cash outflows to USD5.1 billion with an annualised revenue hit of USD18.9 million.
"The strength and diversity of OMAM's multi-boutique franchise - both across our affiliate group and within each firm - enabled OMAM to generate solid core earnings in 2015, notwithstanding exceptional market volatility in the second half of the year," Bain said.
"The first month of 2016 has presented the entire industry with challenges," Bain warned.
"However, we believe that our business is well positioned to withstand such market cycles, as our profit share model provides structural variability to our expenses. We remain committed to investing alongside our affiliates in medium-term growth initiatives, and have made good progress to date," he added.
Shares in London-listed Old Mutual, which owns 65.8% of OM Asset Management, were up 3.8% at 159.10 pence on Thursday.
By Samuel Agini; [email protected]; @samuelagini
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