T. Rowe, AllianceBernstein Bled Assets in First Quarter
Two money managers known for their actively managed strategies suffered declines in assets under management due to market valuations and customers’ flight to safety.
Baltimore-based T. Rowe ended the first quarter with $1.01 trillion in assets, down $198 billion from the end of 2019. Clients pulled $6 billion from riskier and higher-cost equity funds, moving to fixed income and money market strategies, said T. Rowe Chief Executive William J. Stromberg.
Revenue at the company jumped 10.2% to $1.46 billion, but profit slipped 1.4% to $454.3 million from the year-earlier quarter.
To compensate for the uncertain outlook, T. Rowe Price is cutting growth plans. It narrowed guidance on expense growth to 1%-4% from its earlier forecast of 6%-9%. “We are moving forward with key strategic initiatives but will moderate the pace of investment elsewhere,” Stromberg said in a prepared statement.
AllianceBernstein ended March with $541.8 billion in assets under management, down almost $81.2 billion over the first three months of the year.
But the firm’s mix of institutional and retail investors generated net inflows into active equity funds in March while retreating from “volatile and illiquid” fixed-income markets, Chief Executive Seth Bernstein said in a prepared statement.
“While active equities improved, fixed income lagged notably behind expectations, as most strategies maintained a strategic overweight to credit sectors,” he said.
Overall, Bernstein customers effected net withdrawals during the quarter of $5.6 billion, including $600 million in its private wealth business.
The Nashville-based fund company, nevertheless, said quarterly profit rose 6% from a year earlier to $168 million, while net revenue was up 9.9% to $874 million.
Its private wealth customers pulled a net $800 million from active funds and added a net $200 million to passively managed investments. Advisor sales and productivity grew, with gross sales of $3.5 billion up 8% from the first quarter of 2019.
“Looking forward, we expect to experience further market volatility in the face of continued uncertainty stemming from the global effects of COVID-19,” Bernstein said.