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2 June 2008 - Phil Craig

US managers increase UK profits

Profits at the UK asset management arms of US firms Lazard, Bank of New York Mellon and State Street increased substantially last year, despite the credit crunch and turbulent global markets, according to accounts at Companies House.

Lazard’s UK funds arm increased its assets under management by 46% to £9.6bn (€6bn), and revenues increased 47% to £46.8m. Its assets under management were about 8% of Lazard Asset Management’s global total of $110bn (€70.6bn) at the beginning of the year.

Lazard’s assets are mostly derived from institutional investors, who account for the majority of both global and UK funds, according to a spokesman at the firm.

He said the growth in UK assets last year was primarily a result of a more intensive marketing effort and the success of its global investment funds. Pre-tax profits at the UK arm grew to £6.6m, up from £4.7m in last year.

Newton Investment Management, a UK-based asset management subsidiary of Bank of New York Mellon known for being a pioneer in global investing, increased its assets under management by 9.3% to £38.9bn and revenues rose by a third from £117m to £156m. Pre-tax profits rose by a third from £31m to £41m.

State Street Global Advisors, the international asset management arm of its US-based parent, did not report its assets under management, but its revenues increased 26% from £82m to £103m. Pre-tax profits rose 27% from £22.1m to £28.2m.

The arm manages assets for non-US investors. Revenue is derived mainly from the UK, which generated £54m, and European investors, which accounted for £41.3m, according to its accounts. Newton declined to comment. SSgA did not return calls.

BlackRock’s UK arm reported a significant jump in revenues, from £339m for the nine months to the end of September 2006, to £725m for the 15 months to the end of last year. However, pre-tax profits fell between the two periods owing to rising costs associated with BlackRock’s merger with Merrill Lynch Investment Management in 2006.

Tags: Asset Management , Bank of New York Mellon , Lazard , Results , State Street

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