EUROPE – Merrill Lynch Investment Managers’ institutional revenues in Europe have been “surpassed” by retail mutual fund sales for the first time.

The figure comes amid a $13bn drop in MLIM’s total institutional assets under management from a year ago.

“Third-party retail mutual fund sales in Europe and Asia continue to be a strong area of growth for MLIM,” Merrill said in its fourth-quarter earnings report.

“Revenues from these products grew substantially during 2004 and surpassed revenues from institutional products in those regions for the first time during the fourth quarter.”

Total assets under management were broadly flat at $501bn. Increased asset values and positive currency translation were offset by net outflows, primarily in liquidity products.

But institutional assets under management have fallen to $240bn, from $253bn at the end of the fourth quarter of 2003.

MLIM's pre-tax earnings rose 37% in the quarter to $130m – with revenues up 14% to $426m.

Overall, Merrill posted fourth-quarter net earnings of $1.2bn on revenues of $5.9bn.

"We are very pleased with the company's financial and operating performance for the year and for the quarter," said chairman and chief executive Stan O'Neal.

He added MLIM had “improved profitability and continued strong investment performance”.