The second half of 2009 has started positively and business performance has been strong. Highlights include:
* Increase in Assets under Administration (AuA) to $100 billion1 at 30 September 2009 from $83 billion at 30 June 2009
* More than $13 billion of AuA from new clients since 30 June 2009
* Q3 subscriptions were the strongest of the year
* Q3 redemptions were the lowest of the year
* Best client fund performance since second quarter of 2007
Trading for the period has been in line with management's expectations. AuA have grown to $100 billion as of 30 September 2009 from $83 billion at 30 June 2009. During the third quarter of 2009, new clients added $13.1 billion of AuA and new funds from existing clients added $1.0 billion. Subscriptions (excluding inflows to new clients and funds launched in 2009) totaled $5.4 billion during the quarter while redemptions and terminations amounted to $7.3 billion. Client fund performance was a positive $4.2 billion for the period. Adjusted operating profit2 has continued to perform well as expenses remain closely managed.
Hans Hufschmid, chief executive officer, said: "More than $12 billion of our increase in AuA relates to the addition of a new client with a significant portfolio of relatively illiquid assets. The lower volume of processing, and hence pricing, of this new mandate differs from our traditional hedge fund-related clients, but it could be a landmark transaction as we further diversify into new markets and strengthen our position as a leading solutions provider to the evolving alternative asset servicing sector. We will look to translate this win into additional business opportunities in other non-hedge fund areas of the financial services industry that can also benefit from our core strength of effectively integrating high quality people, processes and technology. I am also encouraged by the accelerating level of fund inflows and positive performance that our hedge fund clients have seen throughout the first nine months of 2009."
GlobeOp's financial position remains strong. The Company ended September with a cash balance exceeding $38 million (unaudited) after making a $20 million initial payment toward a previously disclosed legal settlement. GlobeOp made an interim dividend payment totaling approximately $1.1 million on 8 October 2009. The Company continues to have no bank debt.
We see substantial opportunities for our solutions as fund investors demand greater transparency of pricing and risk in combination with reporting independence, and as fund managers seek stronger process controls and cost structure improvements. We believe we are well positioned to capitalize on these opportunities. We are vigorously pursuing hedge fund-related prospects and are also seeking to leverage our core expertise more broadly across the financial services industry.
We remain focused on prudently managing costs and further improving productivity. We continue to be confident in our ability to generate cash flow from operations while introducing new technology and solutions to improve productivity and client service levels.