SWITZERLAND - UBS’s asset-management arm’s profits more than halved in the third quarter, hit by falling asset values and declining fees.

Profits at UBS Global Asset Management fell to 26 million Swiss francs (17.79 million euros) from 59 million francs (40.36 million euros) a year earlier.

Profits were hit by lower asset-management fees, the bank said in a statement accompanying its third quarter earnings.

Overall, UBS’s third-quarter net profit rose 4.3% to 942 million Swiss francs (643.6 million euros), from 903 million francs a year earlier.

According to consultancy firm Mercer, the UBS Global Asset Management has 76.7 billion dollars under management in Europe, making it the continent’s sixth largest manager of pension fund assets

“Invested assets declined to 567 billion Swiss francs on September 30 2002, from 612 billion Swiss francs on June 30 2002, primarily reflecting falling markets and negative currency movements,” UBS said.

Its institutional business saw ‘outflows” from alternative asset mandates and institutional money market funds in the US. It said that net new money in the segment in the period was a negative 3.2 billion Swiss francs.

The bank had net inflows into its wholesale intermediary fund business. The unit saw 1.3 billion Swiss francs of net new money, against an outflow of 4.9 billion Swiss francs in the second quarter.

“Despite the global erosion of equity values in the third quarter, UBS Global Asset Management continued to show a strong relative investment performance in the year to date, 3-year, and 5-year periods,” the bank said.