Legg Mason reported record assets under management of $891.4 billion as of Sept. 30, despite what Chairman and CEO Raymond A. "Chip" Mason termed a disappointing quarter. Assets were up 4.3% from the prior quarter and up 4.8% from Dec. 31, the first quarter following the integration of Citigroup Asset Management's assets into Legg Mason. Market appreciation accounted for $20.3 billion of the $36.7 billion increase in third-quarter AUM, while net client cash flows accounted for the rest. Fixed income and money market assets were "particularly strong," up 5% and 10%, respectively, over the second quarter, according to a news release. And while equity assets increased 1% over the latest quarter, market appreciation just managed to offset $5 billion in net outflows due in part to "weak equity performance from some of our key managers," according to the release.
That relatively weak equity performance was one factor contributing to a 7.9% drop in net income from the prior quarter, the release said. Net income was up 19% from the year before.
In the release, Mr. Mason expressed disappointment with the latest quarterly results but said the integration of Citigroup Asset Management remained on schedule. "We are encouraged by the fact that we entered the (fourth) quarter with higher levels of AUM and a better equity market environment."
In afternoon trading, Legg Mason's stock was down 0.5% at $86.21.