T. Rowe predicts challenging 2016 as revenues increase

Asset manager says it is in a strong position to cope with headwinds in the global economy.

Asset manager T. Rowe Price has reported a 5% increase in net revenues for 2015, but said it expects challenging market conditions to persist this year.

The US-headquartered asset manager reported net revenue for 2015 at $4.2 billion, up 5% from $3.98 billion in the previous year. Q4 2015 performed a little better than the same period of 2014, up 3% to $1.05 billion.

The firm also increased its assets under management from $724.7 billion in 2014 to $767.9 billion last year, a 6% increase. Much of the increase was seen during the final quarter, which saw an additional $37.4 billion of assets under management compared to Q3 2015.

However, net income was down marginally to $1.22 billion for 2015 as a whole, a drop of 1% compared to the previous year and down 4% in the quarter to $303.2 million. Despite this, earning per share have increased from $4.55 to $4.63.

Despite the positive results for the firm, it still sees potential difficulties in the global economy that it must be wary of.

CEO of T. Rowe Price, William Stromberg, said: “We believe that global growth and financial market returns in 2016 will remain modest and that volatility will persist. We expect continued moderate economic growth in the U.S. and Europe. However, the continued economic pressure facing China, the deepening commodities sell-off, Fed tightening, and the strong U.S. dollar are additional headwinds to worldwide growth. Low interest rates in the U.S. and other developed countries should keep bond returns low.”

However he added that the firm’s financial strength, with a strong cash position and no debt, means it is able to continue to make strategic investments in people and key priorities. The firm plans to further expand its investment capabilities, vehicles and distribution reach.

“Early indicators suggest that our efforts to engage new investors around the world are gaining traction, and we are working diligently to build on that success,” added Stromberg.