Moody's: Assets under US management rise slightly in Q4, but revenues decline

In fourth-quarter 2014, as global markets were pulled in two directions, the assets under management by US asset managers rose slightly but revenues in the quarter declined, according to Moody's Investors Service.

In its "US Asset Managers: Q4 2104 Quarterly Update," Moody's says aggregate assets under management (AUM) increased 1.7% for the group, although a 2.87% rise for Blackrock outstripped the 0.8% growth for the other managers. BlackRock had $105 of inflows during the quarter, but for the other managers inflows and outflows were a zero sum. The number of managers reporting inflows was the same as the number reporting outflows.

"A complex of unusual factors were at work last quarter declining effective fee rates given the mix of products and the growing use of cheaper passive products," says Moody's VP -- Senior Credit Office Neal M. Epstein. "Seasonal performance fees boosted certain managers' revenues, but less than in prior years."

Both revenue and EBITDA decreased for the group, with aggregate revenue falling 1.3% from the previous quarter.

In general, the rising dollar was an obstacle for the US managers, says Moody's. The appreciation of the US dollar against other currencies may affect revenue and assets differently, depending on the currency in which accounts are billed. The mix of assets, given the divergence of global market performances, may have been a greater factor than in other periods. The group's fundamentals, however, remain stable and debt burdens are manageable.

During the quarter total debt outstanding declined, with only three managers issuing debt totaling $605 million and BlackRock repaying $1 billion in maturing notes. Leverage was unchanged for the group, at 0.9 times EBITDA.