US - T. Rowe Price Group assets under management (AuM) increased to a record US$308.1bn in the third quarter of 2006, an increase of $14.4bn from the previous quarter.
The firm's Q3 results showed that $4.2bn of the increase in AuM was due to net cash inflows from investors while $10.2bn were accounted for by higher market valuations and income.
Quarterly avergae AuM in the 2006 Q3 were a record $297.9bn, almost $44bn higher than the average posted in the same quarter last year.
Investment advisory revenues were up by 17% over the 2005 Q3 to $375m. The revenues earned from other managed investment portfolios, consisting of institutional separate accounts, sub-advised funds, sponsored mutual funds offered to non-US investors and variable insurance portfolios, increased by $19m to more than $104m.
Ending assets in these portfolios were $117.3bn at the end of September 2006. Assets in these portfolios increased $6.8bn during the quarter. This was attriubted to from net inflows of $2.6bn from investors and higher market valuations of more than $4.2bn.
The company's operating expenses also increased by $41m, or 20%, to $250m. The largest portion of the increase is due to the $15.6m non-cash expense recognised for stock-based compensation.
The company posted a quarterly net revenue of $451m, a 16% increase compared to the same period last year.
Commenting on the results, George Roche, T.Rowe Price chairman and president said: "65 of the T. Rowe Price stock and bond funds and their share classes, which account for nearly 76% of stock and bond fund assets under management, ended the quarter with an overall rating of four or five stars from Morningstar. These four and five-star rated investments represent 60% of our rated funds and share classes, compared with 32.5% for the overall industry."
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