Net revenues were $728 million, representing an increase of 6 per cent from the same quarter a year ago, but also down versus Q1. The firm said lower investment advisory fees offset gains in other areas to drive down revenues.

"Rising concerns over European sovereign debt, unrest in the Middle East, the implications of the Japanese earthquake and signs of a slowdown in the US economic recovery weighed on investment performance and reduced equity investors' appetite for risk," said Peter Kraus, chairman and chief executive, referring to the fact that both revenue and operating income were down on a linked-quarter basis.

He said the firm has continued to underperform in the large-cap equity space, which along with the macroeconomic picture heightened client redemptions in the second quarter. However, he emphasized that the firm remained committed to its core investment discipline of buying inexpensive cash-flow stocks, and would not be changing course.

Over the quarter, the S&P 500 rose 0.1 per cent and the MSCI World Index was up 0.5 per cent.

The firm’s private client assets under management were $77.1 billion as at 30 June 2011, after the unit saw $2.6 billion of net outflows over the three-month period, following $0.7 billion of outflows in the first quarter. Gross sales at the private client channel also decreased sequentially, from $2.3 billion in Q1 to $1.5 billion during the second quarter.