Legg Mason today reported assets under management of $998.5 billion as of Dec. 31, down 1.3% from the prior quarter but up 5.7% from the year before. In an earnings conference call this morning, newly appointed President and CEO Mark Fetting and Chairman Raymond Chip Mason both said the fall in fourth-quarter AUM reflected net client outflows of $9.1 billion and market depreciation of $4 billion. They cited continued underperformance at key equity-focused subsidiaries Legg Mason Capital Management and Clearbridge as a factor behind net equity outflows of $10.6 billion for the quarter. Liquidity outflows were $500 million. Fixed income enjoyed inflows of $2 billion, although that was down from inflows of $11 billion for the previous quarter.
Calling recent performance woes almost a perfect storm, Mr. Mason noted that star Legg Mason veterans at subsidiaries such as Legg Mason Capital and Western Asset Management have bounced back strongly from prior periods of weakness, and should do so again.
For the latest quarter, total operating revenue came to $1.187 billion, up 1.2% from the prior quarter and 4.7% from the year before. Net income came to $154.6 million, down 13% from the prior quarter and 12% from the year before. Along with the decline in AUM, Legg Mason cited a roughly $23 million charge, resulting from support the company announced previously for certain asset-backed commercial paper investments, as a factor behind the decline in earnings.
Also today, Affiliated Managers Group reported assets under management of $274.8 billion as of Dec. 31, down 0.7% from the prior quarter but up 14% from the year before. For the latest quarter, AMG saw net outflows of $7.2 billion and market depreciation of $5.7 billion, partially offset by an influx of $10.8 billion from investments in new affiliates ValueAct Capital and BlueMountain Capital Management. Sean M. Healey, president and CEO, said in a conference call that institutional outflows of $6.4 billion during the quarter partly reflected a tough period for quantitative strategies, but almost half of that outflow was because of a portfolio restructuring by an unidentified client that continues to do business with AMG. AMG executives said growth equity and international strategies managed by their affiliates enjoyed strong performance for the quarter. Mr. Healey said opportunities to make investments in new affiliates, especially in firms focused on alternatives and international strategies, have never been better.
For the quarter, revenue came to $383 million, up 11% from the prior quarter and up 16% from the year before. Net income came to $60.9 million, up 43% from the prior quarter in part because of realization of performance fees, and up 24% from the year before.