Waddell & Reed, AMG Q4 profits, inflows fall

(Reuters) - Asset managers Waddell & Reed (WDR.N) and Affiliated Managers (AMG.N) saw inflows of new client money fall to their lowest level in several quarters, with more money moving to lower-fee funds, hurting their profit.

Main Street investors, whose nest eggs were decimated by falling share prices in the wake of the credit crisis, have yanked their cash out of funds tied to the stock market. This has hurt asset managers who earn fees on actively managed equity funds.

But companies with a wider range of products, like exchange-traded funds and alternative assets like private equity and hedge funds, have attracted customer money.

AMG, with products across the globe and a in a wide range of sectors -- including alternative managers like AQR, BlueMountain Capital Management -- saw $4.1 billion in inflows.

The new inflows, the least seen in over a year, were mostly in global equity, emerging market and alternative investment funds and the money was put in by non-U.S. clients, AMG said on a call.

But the company expects investors to return to equities in 2012, a view echoed by Invesco Ltd (IVZ.N) when it reported last week.

Waddell & Reed, which began in 1937 and is known for its Ivy fund family, attracted just $42 million in client funds, its lowest level in over 2 years.

Affiliated Managers had "best in class" flows and remains a top pick, Citigroup analyst William Katz said in a note to clients.

In a separate note, Katz called Waddell's inflows weak and said the lead indicators, though improved from the end of 2011, were still mixed for this year.

AMG said it sees substantial opportunities to make investments in new boutique investment firms and to grow its international operations.

"We are continuing to invest in our global platform, adding additional resources in key strategic markets, including Australia, Europe, Asia, and the Middle East with a new office in Dubai," AMG Chief Executive Sean Healey said in a statement.

In the quarter, AMG topped Wall Street estimates with an economic profit of $1.76 per share.

On a post-earnings conference call, AMG raised the lower end of its 2012 outlook to $6.70-$7.40 on an economic basis. Analysts were expecting an economic share of $7.15 for the year, according to Thomson Reuters I/B/E/S.

Waddell's quarterly profit fell 14 percent and slipped under analysts' estimates.

Overland Park, Kansas-based Waddell's shares were down 7 percent at $28.38 in afternoon trade on Tuesday on the New York Stock Exchange.

Boston-based AMG's shares were nearly flat at $100.94.

(Reporting by Jochelle Mendonca and Aman Shah in Bangalore; Editing by Gopakumar Warrier)