GLOBAL - Morgan Stanley has reported a 50% decline in pre-tax income at its asset management business for the fourth quarter.

The division posted pre-tax income in the period of $190m (€144m) - half the prior year period's $383m.

The bank said: "The decline in pre-tax income reflected a 19% decline in net revenues to $718m, driven by significantly lower investment revenues, principally in the private equity business, which declined from $227m in the fourth quarter of 2005 to $42m in the current quarter.

The quarter's pre-tax margin declined to 27% from 43%.

For the full-year, the unit's pre-tax income fell 29% to $711m, with revenues down 5% at $2.8bn.

Assets under management or supervision at November 30 were up 11%, or $37bn, to $478bn. It said: "The increase resulted from market appreciation partly offset by customer out-flows."

The bank added: "Asset Management made significant progress this year in executing its strategic plan and building a solid foundation for future profitable growth.

"During the fourth quarter, the division launched 15 new products and expanded its alternative investment business through the announced acquisition of FrontPoint Partners and minority investments in Avenue Capital and Lansdowne Partners.

Overall, the bank's full-year income rose 44% to $7.5bn.