Gluskin Sheff + Associates Inc. third-quarter profit fell by 37% as declines in equity markets bit into the independent investment managers revenues.

Net income was $4.1 million, or 14¢ a share, for the third quarter ended March 31. The compared with $6.5 million, or 23¢ a share, in the year-earlier period.

Total revenue during the quarter was $14.4 million, down from $20.3 million a year ago.

The company’s revenues are derived from base management fees, calculated as a percentage of assets under management, performance fees, which are earned when the company exceeds pre-specified rates of return, and investment and other income.

During the quarter, AUM increased by approximately $0.2 billion from $3.7 billion as at Dec. 31, 2008 to $3.9 billion as at March 31, 2009. This increase was primarily attributable to net additions, Gluskin Sheff said.

Base management fees fell during the quarter to approximately $14.3 million from $19.8 million in the year-earlier period, a drop of approximately 28%.

Investment and other income during the third quarter was approximately $0.1 million versus $0.5 million for the year-ago period.

“Notwithstanding considerable efforts on the part of governments and central banks around the world, the first two months of 2009 saw continuing significant declines in the equity markets, much of which were erased in the March rally” commented Gerald Sheff, chairman and CEO, in a release.

“Looking ahead, with the addition of David Rosenberg as chief economist and strategist and the recent appointment of Brian Ginsler as COO, we continue to build our team and prudently manage the business to ensure that we remain well-positioned to capitalize on the various opportunities presented by changing market conditions,” Sheff concluded.

The company also announced that Hugh Segal tendered his resignation as a director of the Company, effective March 3.

IE