(Reuters) – Asset manager Invesco on Tuesday, reported a loss in the fourth quarter compared to a profit last year, hurt by lower fees and a non-cash asset impairment charge of $1.2 billion. The charge was related to some management contracts of U.S. retail mutual funds that Invesco had previously acquired.
Investment management fees, Invesco’s chief revenue source, dipped 0.4% to $1 billion from last year.
Asset managers have found their fees squeezed in a high interest-rate environment even as hopes of a soft landing for the U.S. economy – a scenario where inflation eases without a sharp rise in unemployment – has helped rekindle limited investor interest, who continue to prefer safe-haven assets.
Some Federal Reserve policymakers have also been warning against unfettered optimism about rate cuts, prompting investors to wait for more certainty before taking on risk.
Shares of Invesco were down 3.1% at $16.85 in premarket trading, after the results.
Performance fees, which Invesco earns when the returns from its funds meet certain previously agreed-upon criteria, plunged 64.5%.
Assets under management (AUM) at the end of the quarter climbed 12.5% to $1.59 trillion. Total net outflows stood at $8.3 billion, hurt chiefly by an investor exodus from money market funds.
The asset manager reported a net loss of $742.3 million, or $1.64 per share, compared with a profit of $187.8 million, or 41 cents per share, in the year-ago period.
Earlier this month, larger peer BlackRock reported an 8% rise in quarterly profit earlier in the month, helped by a boost in its AUM.
(Reporting by Pritam Biswas in Bengaluru; Editing by Tasim Zahid)