November 26, 2010

Eaton Vance’s Q4 and 2010 Earnings Up, Along With Net Inflows

Inflows up despite losing SMA overlay business following BofA acquisition of Merrill

Eaton Vance Corp. posted record revenue and record assets under management for its fiscal 2010 ended Oct. 31, 2010, the company reported Tuesday, and earned $1.40/diluted share for the full year compared to $1.07/diluted share in FY 2009.

The Boston-based asset management firm said net inflows for FY 2010 were $16.3 billion compared to $13.5 billion in fiscal 2009, despite a reduction of $1.5 billion in inflows due to subsidiary Parametric Portfolio Associates losing the outside overlay management business of Merrill Lynch’s retail managed account (RMA) overlay program due to Bank of America’s 2009 acquisition of Merrill.

However, in Q4 of 2010, Eaton Vance saw a decline to $3.2 billion in net inflows into long-term funds and separate accounts, compared to net inflows of $5.5 billion in the fourth quarter of fiscal 2009 and $4.8 billion in the third quarter of fiscal 2010.

The company said its annualized internal growth rate (which it defines as total net inflows divided by beginning-of-period long-term assets) was 7% in Q4 of FY 2010 and 11% for the full fiscal year. AUM as of Oct. 31 increased 20% for the year to $185.2 billion, a new all-time high, the company said.

Thomas Faust Jr., chairman and CEO of Eaton Vance, said in a statement that the company  “achieved strong business results in fiscal 2010, with double-digit organic growth, record revenue and record assets under management at fiscal year end.”

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