(Reuters) -Asset manager T. Rowe Price’s third-quarter profit rose on Friday, as soaring markets boosted its assets under management and the corresponding fees, cushioning a hit from outflows.
Shares of the company rose 2.2% in premarket trading.
Major indices and asset classes extended their rallies through the quarter, hitting consecutive record highs as AI vigor and falling interest rates gave investors confidence who had been worried about macroeconomic cracks and tariffs.
This helped assets under management, which are largely tied to the performance of underlying investments and client money flow.
T. Rowe’s AUM jumped 8.4% in the quarter ended September 30 despite net client outflows of $7.9 billion.
“We reached an end-of-period high with $1.77 trillion in AUM as of September 30 and created an opportunity to bring innovative new solutions to market for our clients with our recently announced strategic collaboration with Goldman Sachs,” CEO Rob Sharps said in a statement.
In September, T. Rowe and Goldman struck a deal under which the U.S. dealmaker will invest up to $1 billion in the company, marking the beginning of a partnership to package alternative assets into T. Rowe’s retirement money.
T. Rowe’s active buying and selling strategies have lost favor over the years, following the popularity of low-cost passive fund managers that aim to track an underlying asset or index.
The company has been diversifying its offerings to win back customers.
Last week, it filed to launch an actively managed exchange-traded fund tied to multiple digital currencies, foraying into the cryptocurrency space.
Investment advisory fees, typically a percentage of the AUM, rose 4.4% to $1.7 billion in the third quarter from a year ago.
It earned a profit of $646.1 million, or $2.87 per share, compared with $603 million, or $2.64 per share, a year ago.
(Reporting by Ateev Bhandari in Bengaluru; Editing by Shinjini Ganguli)
