Bermuda-based asset managers W.P. Stewart & Co., Ltd. suffered a sharp fall in assets under management and net income in its fourth quarter.

Net income was $9.4 million, or $0.21 per share (diluted) and $0.22 per share (basic), for the fourth quarter.

This compares with net income in the fourth quarter of the prior year of $17.5 million or $0.37 per share (diluted) and $0.40 per share (basic).

For the full year ended 31 December 2002, net income was down 30.9 percent to $55.5 million, or $1.21 per share (diluted) and $1.27 per share (basic), on revenues of $137.3 million.

Net income in 2001 was $80.3 million, or $1.71 per share (diluted) and $1.85 (basic), on revenues of $160.7 million.

Assets under management at quarter-end were approximately $7.7 billion, reflecting an increase of approximately $400 million, or 5.5 percent, from the end of the prior quarter, and a decline of $1.5 billion, or 16.3 percent from December 31, 2001.

"W.P. Stewart concentrates its investments in large, generally less cyclical growing businesses," the company said in a statement. "Throughout most of the company's 28-year history, the growth in earning power behind clients' portfolios has ranged between approximately 11 percent to 22 percent annually.

"The extraordinary combination of economic and political events in 2001 resulted in the growth in portfolio earning power in 2001 dropping below the usual range even while remaining solidly positive. Portfolio earnings growth recovered strongly in 2002 and the company's research analysts expect portfolio earnings growth to be within the historical range over the next five years."

The company said cash earnings for 2002 were $63 million, or $1.37 per share (diluted), versus $87.2 million, or $1.86 per share (diluted), for 2001.

Revenues were $29 million for the quarter ended 31 December 2002, down 17.9 percent from $35.4 million, for the same quarter of 2001. Revenues for the year ended December 31, 2002 and 2001 were $137.3 million and $160.7 million, respectively.

Total operating expenses increased 5.1 percent to $18.6 million, for the fourth quarter 2002, from $17.7 million in the same quarter of the prior year.

Total operating expenses were $75.4 million and $73.3 million for the year ended 31 December 2002 and 2001, respectively

Performance in the W.P. Stewart US equity composite for the fourth quarter of 2002 was 5.3 percent pre-fee and five percent post-fee. For the full year ended December 31, 2002, the company's performance was -14.4 percent pre-fee and -15.6 percent post-fee.