Cumulative assets under management of 18 publicly traded asset management firms increased by 2.4% in the third quarter, SS&C Technologies Holdings reported Wednesday.
Fifteen firms demonstrated sequential growth as cumulative assets rose to $12.96 trillion from $12.66 trillion in the second quarter.
Net flows were the proverbial fly in the ointment for the asset management industry during the third quarter, according to the report. After the composite group’s net flows in the second quarter declined for the first time in nine quarters, the outflows accelerated to $32.4 billion in the third quarter.
However, only 12 firms in the composite group experienced net outflows, compared with 14 firms in the previous quarter.
Strong market performance across all 17 firms that report flows and market performance offset the net outflows, the report said.
“Ultimately it was solid market performance in Q3 that was able to more than compensate for an acceleration in net outflows for the composite group, resulting in a solid recovery in cumulative AUM,” Matthew Fronczke, director of strategic business consulting at SS&C Research, Analytics and Consulting, said in a statement.
“The big unknown is how capital markets will finish the fourth quarter, which have been turbulent so far.”
Since the first quarter of 2009, SS&C has performed consolidated financial statement analysis using the public quarterly earnings of the composite of 15 asset management firms. SS&C noted in a statement that it had added three recently public firms to the composite in the second quarter in order to be more comprehensive in its analysis.
Each quarter’s analysis includes an adjustment to operating margins to account for one-time charges, but does not include adjustments for stock-based compensation and goodwill amortization as there are variances in reporting by individual asset management firms.
The 15 original firms in the composite are Affiliated Managers Group, Alliance Bernstein, Artisan Partners, BlackRock, Cohen & Steers, Federated Investors, Franklin Templeton, Gamco, Invesco, Janus Henderson Group, Legg Mason, Pzena Investment Management, SEI, T. Rowe Price and Waddell & Reed.
The three recently added ones are Diamond Hill Investment Group, Manning & Napier and Victory Capital.