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Why Earnings Rose in Prudential’s Asset Management Business

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Growth in average AUM

Prudential Financial’s (PRU) average assets under management (or AUM) rose in 2Q17 compared to 2Q16. In 2Q17, the company’s average assets under management stood at ~$1.1 trillion, and in 2Q16 its AUM stood at ~$1.0 trillion. Out of the average AUM of ~$1.1 trillion, fixed income constitutes $805.0 billion, equity constitutes $181.0 billion, and real estate constitutes $104.0 billion.

In 2Q17, earnings from Prudential’s asset management business stood at $218 million compared to $207 million in 2Q16. This YoY (year-over-year) rise in the earnings was mostly due to asset management fees. 

Out of $218 million of revenues generated, $189 million was generated through asset management fees, and $29 million was generated through other related sources. 

However, in 1Q17, earnings from Prudential’s asset management business stood at $196 million. Out of $196 million generated, $167 million was generated through asset management fees, and $29 million was generated through other related sources.

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Levered free cash flow

Levered free cash flow of Prudential Financial (PRU) on a trailing-12-months (or TTM) basis stood at -$2.7 billion. The levered free cash flow of other insurance companies (IYF) on a TTM basis are as follows:

  • Chubb Ltd. (CB): ~$2.2 billion
  • Allstate (ALL): ~$4.8 billion
  • MetLife (MET): ~$34.6 billion
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