Retail clients drive deposits, profits at T. Rowe

Money manager relies on individuals saving for retirement, rising stock prices to offset institutional withdrawals

Apr 24, 2014 @ 8:58 am

T. Rowe Price Group Inc. (TROW), the money manager that has reported a profit every quarter since going public in 1986, said first-quarter earnings rose 25% as retirement savers helped lift assets.

T. Rowe has relied on individual investors saving for retirement and rising stock-market valuations to bolster assets for much of the past year as it struggled with withdrawals by institutional clients. Assets rose 2.7% from the prior quarter to $711.4 billion.

“Industry data suggests that retail mutual fund segment was pretty good in the first quarter,” James Shanahan, an analyst who covers the company at Edward Jones & Co. in St. Louis, said in an e-mail before results were announced.

(See also: Are active ETFs finally growing in popularity?)

Net deposits totaled $8.8 billion in the first three months of 2014. The Standard & Poor's 500 Index of large U.S. stocks advanced 1.3% during the quarter and 19% in the year ended March 31.

Net income at T. Rowe increased to $301.1 million, or $1.12 a share, from $240.1 million, or 91 cents, a year earlier, the Baltimore-based company said Thursay in a statement. Earnings beat the $1.03 average estimate of 10 analysts in a Bloomberg survey.

BlackRock Inc. (BLK), the world's largest asset manager, said on April 17 that its first-quarter net income climbed 20% to $756 million. Investors deposited a net $27 billion.

Through Wednesday, T. Rowe shares were off 3.1% this year compared with a 5% drop for the Standard & Poor's 18-company index of asset managers and custody banks.

(Bloomberg News)

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