Volatility hits 3 more U.S. asset managers

Tue Oct 25, 2011 11:51am EDT

(Reuters) - U.S. asset managers including T. Rowe Price Group (TROW.O) posted quarterly results that failed to impress investors, as market turmoil in Europe and economic uncertainty at home continued to hurt the companies.

All three companies -- T. Rowe, Affiliated Managers Group Inc (AMG.N) and Waddell & Reed Financial Inc (WDR.N) -- that reported on Tuesday saw a fall in assets under management (AUM) from the prior quarter.

The decline in AUM follows a similar trend seen at other top money managers like BlackRock Inc (BLK.N) and Invesco Ltd (IVZ.N) that have already posted quarterly numbers.

"There remains significant uncertainty surrounding Europe's struggle to the sovereign debt crisis," Waddell & Reed Chief Executive Hank Herrmann said on a post-earnings call.

Shares of all three companies were trading in the red.

T.Rowe reported its first quarterly net outflow of investor cash since the end of 2008, sending its shares down as much as 10 percent in morning trade.

The Dow Jones U.S. Asset Managers Index .DJUSAG, which has fallen about 20 percent since the beginning of this year, was down about 2 percent on Tuesday morning. T.Rowe and Waddell & Reed were the worst performers on the index.

The Standard & Poor's 500 Index's .SPX fall during the last quarter, on growing concerns about Europe's debt crisis and the U.S. economic and political outlook, has cut into asset managers' share prices.

Waddell & Reed's net inflows for the quarter were $1.3 billion. However, during the first three weeks of October, sales were about $1 billion and the company was seeing slight outflows.

AUM at T.Rowe fell to $453.5 billion at September end, from $520.9 billion at June end.

AUM at AMG were $306 billion at September end, down about 4 percent from the prior quarter. Waddell & Reed's average AUM also fell 4 percent on a trailing basis to $87.4 billion.

Last week, the world's largest money manager, Blackrock reported earnings that topped Wall Street estimates, but offered a sour outlook for investors, blaming the recent market turmoil on inconsistent and poorly planned government actions in Europe.

(Reporting by Tanya Agrawal and Brenton Cordeiro in Bangalore; Editing by Supriya Kurane)