Waddell & Reed Breaks $100B in AUM

Executives at Waddell & Reed Financial have a few billion reasons to smile. In fact, the firm reported that its assets under management broke $100 billion during the first quarter and reached $103.8 billion.

The Overland Park, KS-based firm today reported sales of $6.8 billion, representing a multi-year high, having only exceeded that level once, during the first quarter of 2008. Net inflows of $2.1 billion represent an annualized organic growth rate of nearly 9%.

Sales from its wholesale channel (encompassing broker/dealer, retirement, and registered investment advisors) were $5.0 billion during the quarter, a 40% improvement over the previous quarter and a 12% improvement compared to the same period last year. Net flows of $2.0 billion reflect a sharp improvement to the slight outflows experienced during the fourth quarter of 2012 and were twice as much as last year’s first quarter.

In its advisors channel, sales marked a new record at $1.3 billion, an 8% improvement compared with the previous quarter and a 19% improvement compared to the same period last year. Net inflows were $190 million during the current quarter, better than the outflows of $75 million last quarter and net inflows of $158 million during the first quarter of 2012.

Its institutional channel (including defined benefit plans, pension plans and endowments, and subadvisory partnerships) had sales of $430 million, a reduction compared to both the first and fourth quarters of 2012.

“This year is off to a good start. Sales were solid each month with only an 8% difference between the monthly high and low,” stated Hank Herrmann, Chairman and Chief Executive Officer of Waddell & Reed.

“Flows were similarly steady with each month firmly in positive territory. While it is still too early to tell where retail clients are along the re-risking continuum, the first few months of this year feel decidedly more positive.”

The firm also reported first quarter net income of $53.9 million, or $0.63 per diluted share, compared to net income from continuing operations $52.4 million, or $0.61 per diluted share during the fourth quarter of 2012 and net income from continuing operations of $46.8 million, or $0.55 per diluted share during the first quarter of 2012.