T. Rowe Price, Janus Capital suffer third-quarter outflows

Despite customer withdrawals, money managers at T. Rowe, Janus report profits for the period.
JAN 23, 2014
Money manager T. Rowe Price Group Inc., which has about three-fourths of its assets in equities, suffered $7.4 billion in outflows in the third quarter, marking the second-straight quarter of net redemptions. Although the withdrawals were offset by the appreciation in market values as the MSCI ACWI Index of global stocks rose 7.4% in the quarter and 15% year-to-date through Sept. 30, they “are the most relevant metric investors will focus on,” said Michael Kim, an analyst with Sandler O'Neil & Partners. “T. Rowe was at the top of the charts related to organic growth, but that hasn't been the case for the past few quarters.” Another money manager, Janus Capital Group Inc., also reported a loss of funds. In the third quarter, clients withdrew a net $4.2 billion for the company's 17th consecutive quarter of redemptions. Still, its third-quarter net income rose 30% to $32.6 million as markets boosted assets. At T. Rowe, assets under management increased 5.4% in the quarter and 13% from a year earlier to $647.2 billion. The company reported record withdrawals of $8 billion in the three-month period ended June 30 and now has seen net redemptions in three of the last four quarters. Strong performance and T. Rowe's retirement-related products had helped the firm attract deposits in each of the past five years. The company gathered $17.1 billion in 2008 when U.S. mutual funds, excluding money-market funds, lost $225 billion to withdrawals. Overall, the money manager said third-quarter earnings rose 9% as a global stock rally boosted the holdings it oversees for clients. T. Rowe has posted a profit every quarter since going public in 1986. Net income increased to $267.7 million, or $1 a share, from $245.7 million, or 94 cents, a year earlier, the company said Thursday. Earnings beat the 97 cent average estimate of 14 analysts in a Bloomberg survey. Through Wednesday, T. Rowe Price stock was up 20% this year, compared with a 34% gain for the Standard & Poor's 20-company index of asset managers and custody banks. (Bloomberg News)

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