Gluskin Sheff + Associates Inc. recorded sharply lower profit for the second quarter, the Toronto-based wealth management firm said Thursday.

Net income for the quarter ended Dec. 31, 2008 was $5.1 million, or 18¢ a share, compared with $14.1 million, or 49¢ a share in the year earlier period.

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

During the quarter, AUM decreased by approximately $0.7 billion to $3.7 billion.

For the quarter, base management fees decreased to approximately $14.6 million from $21.6 million, a drop of 32%.

Performance fees in the second quarter of fiscal 2009 were approximately $3.1 million, down from $12.9 million in the year-earlier period.

Investment and Other Income posted a loss of approximately $0.1 million for the quarter versus a gain of $0.9 million for the year-ago period.

“2009 promises to be a challenging year for world economies. We don’t know how capital markets will perform, but we are confident that we are in a strong position to weather the storm and benefit when it subsides”, said Gerald Sheff, chairman and CEO, in a release.

The company also announced that Sir David Davies has tendered his resignation as a director of the company, effective Jan. 23.

IE