Legg Mason reported Tuesday that its money management affiliates had combined assets under management of $677.6 billion as of March 31, up 0.9% from the prior quarter but down 1% from the year before.
For the latest quarter, market gains of $16.6 billion more than offset net client outflows of $8.7 billion. Those outflows were roughly half of the previous quarter’s outflows of $16.7 billion and down as well from year-earlier outflows of $10.9 billion.
Speaking to analysts in a conference call Tuesday about Legg’s latest results, Mark R. Fetting, the company’s chairman and CEO, said new products by the company’s affiliates raised $4.1 billion during the latest quarter, which helped sharply reduce net outflows.
By asset class, fixed income accounted for $6.7 billion in outflows, with another $1.3 billion from equity and $700 million from liquidity products.
Mr. Fetting noted that fixed-income outflows were the lowest in more than three years.
By affiliate, Mr. Fetting cited continued improvements for Western Asset Management, the company’s giant bond manager, which reported $455.2 billion in AUM as of March 31, little changed from the prior quarter but down 5% from the year before. “We are pleased that long-term outflows (from Western) have declined 60% from the previous quarter and were positive for March,” he told analysts.
Permal Group, Legg’s hedge-fund-of-funds manager, reported $20.8 billion in AUM, up 6% from the prior quarter and up 19% from the year before.
Mr. Fetting noted that Permal has unfunded wins of more than $550 million, with institutional clients accounting for much of those flows. For the coming quarter, however, a restructuring involving Permal’s marketing of a single-manager hedge fund strategy will shave $500 million from Permal’s AUM. The manager in question will assume responsibility for the strategy’s marketing, even as Permal continues to garner revenues under the previous arrangement for another three years, said Legg Mason spokeswoman Mary Athridge.
Among the company’s equity affiliates, Royce & Associates posted the strongest gains; it had $43.9 billion in AUM, up 11% from the prior quarter and up 29% from the year before. By contrast, Legg Mason Capital Management lagged with $15.2 billion in AUM, down 4% from the prior quarter and down 15% from the year before.
For the latest quarter, net income attributable to Legg Mason Inc. came to $69 million, up 12% from the prior quarter and up 8.5% from the year before.
Operating revenue, meanwhile, came to $713.4 million down 1.2% from the prior quarter but up 6.3% from the year before.