Adjusted operating income was $378 million, flat from prior quarter, driven by lower compensation expenses offset by Western outflows and lower average AUM.
Assets under management ended the quarter at $1.61 trillion, increased from the prior quarter due to positive markets and strengthening flows, partially offset by long-term outflows at Western Asset Management.
Equity net outflows were $645 million, impacted by market volatility affecting growth strategies; positive net flows into large cap value, international, and emerging market strategies.
Fixed income net outflows improved to $1.3 billion; excluding Western, fixed income net inflows were $3.5 billion, driven by Franklin Templeton Fixed Income and Brandywine Global.
Institutional pipeline of 1 but unfunded mandates rose by net $4 billion to a record $24.4 billion, including $14.8 billion in new wins across all asset classes and multiple regions.
Long-term net outflows totaled $9.3 billion, an improvement from the prior quarter's $26.2 billion outflows; excluding Western Asset Management, long-term net inflows were $7.8 billion this quarter.
Multi-asset and alternatives generated combined $4.3 billion in positive net flows; multi-asset flows have been positive for 16 consecutive quarters.
Over half of mutual fund AUM outperformed peer median across 3-, 5-, and 10-year periods; mutual fund investment performance increased in 3-, 5-, and 10-year periods but declined in 1-year period due to a large yield fund.
Western net outflows moderated to the lowest since September 2024; money market balances grew with cash management net inflows for 4 of the last 5 quarters, increasing cash management AUM to $72 billion.
Dafinchi