GLOBAL – Merrill Lynch Investment Managers’ assets under management fell in 2002 for the third consecutive year.
In its 2002 earnings report today, Merrill Lynch confirmed that at end 2002, MLIM’s assets under management were 462 billion dollars (431 billion euros). This compares to 529 billion dollars at the end of 2001, 557 billion dollars at the end of 2000, and 594 billion dollars at the end of 1999.
The company remains positive, however, having enjoyed a bounce in the fourth quarter of 2002, due primarily to five billion dollars of net inflows and market-driven appreciation. Approximately 70% of MLIM’s global assets under management outperformed the benchmark in the fourth quarter.
Looking forwards, the report says that: “MLIM will continue to make investment performance its first priority in 2003 as it further refines its product array, broadens distribution, and targets selected growth opportunities.
“Enhancing penetration of the global private client channel for all MLIM products remains a top priority. Expanding third-party distribution in Europe and the US, and building on the success of MLIM's alternative investment products, also remain priorities for the upcoming year.”
MLIM’s profitability for 2002 improved despite the difficult market environment says Merrill Lynch. MLIM’s full-year 2002 pre-tax operating earnings were 344 million dollars, a 14% increase from 2001. Net revenues were 1.6 billion dollars, 20% lower than 2001. MLIM's pre-tax operating margin was 22.2%, more than six percentage points higher than in 2001, as the integration of MLIM's global investment platform and realignment of resources reduced expenses and improved productivity.
For the fourth quarter, MLIM posted increased pre-tax operating earnings and margins on net revenues of 339 million dollars, 26% lower than the year-ago period. Pre-tax operating earnings were 73 million dollars, 22% higher than the 2001 fourth quarter, which was negatively impacted by increased litigation expense. MLIM's pre-tax operating margin improved to 21.5%, more than eight percentage points over the fourth quarter of 2001.