US - Marsh & McLennan (MML) has blamed the turbulent state of the equity markets for a 30% fall in subsidiary Putnam Investments' third quarter profits.
During Q3, Putnam recorded $189m in profits, with revenues standing at $616m. Those figures are down considerably from a year ago, when the Boston based asset manager recorded profits of $275m and revenues of $863m.
Putnam's average assets under management fell sharply compared to the the same period last year, assets under management stood at $286bn. A year ago that figure stood at $406bn.
Additionally, Putnam's margins in Q3 and the year to date declined by approximately 31%, a figure that MML attributes to cost-containment efforts taken earlier in the year. Putnam generated 26% of MML's $2.4bn total revenue in Q3, down from the 34% of the $2.5bn total a year ago.
MML's consulting business, the Mercer Consulting Group, brought in $536m in revenue during the quarter or 22.6% of the firm's total revenue. The unit fared well during the quarter, with revenue declining by just 1% from the $540m earned last year, whilst operating income fell 4% to $81m.
Underlying revenues for retirement consulting, which accounts for more than 40% of Mercer's business, increased 10%. The only real disappointment for the firm was the 25% fall in demand for general management consulting.
By Geoffrey Ho
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