Federated Investors bucked the trend of falling profits and AUM in the fund industry, posting a 3 percent rise in its fourth quarter earnings. The Pittsburgh-headquartered company earned $54.3 million, compared with $52.7 million in the year-ago period. Its AUM hit a record $407.3 billion at the end of December, up from $334 billion at the end of September and $105.7 billion at the close of 2007.

"As investors sought haven from unprecedented market conditions, demand for our money market funds and fixed-income investments during 2008 enabled Federated to reach record highs in managed assets," said Federated president and CEO J. Christopher Donahue.

At the end of 2008, money market mutual fund assets totaled $327.3 billion, fixed income assets were $25 billion and equity assets were $26.7 billion.

Sixty-nine percent of Federated's fourth quarter revenues came from money market assets.

Fourth quarter revenues were up slightly, to $301.8 million compared to $300 million in the year-ago period. The increase in revenue from higher average money markets were partially offset by factors such as a $5.6 million increase in voluntary fee waivers, which included $3.4 million in fee waivers on some money market funds to maintain zero to positive net yields.

"Fee waivers to produce positive or zero net yields are expected to increase and these increases could be significant," Federated executives said in the release. 

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