Legg Mason on Friday reported $627 billion in assets under management as of Dec. 31, up 2.4% from the prior quarter but down 6.7% from the year before.
For the quarter, market appreciation added $17.6 billion to AUM, offset by $1.3 billion of net outflows and another $1.1 billion of dispositions related to Morgan Stanley Smith Barney's decision to move that firm's money market “sweep” assets in-house.
The company saw outflows of $7.1 billion and $4.9 billion from its fixed-income and equity offerings, respectively, offset by liquidity inflows of $10.7 billion. The resulting $1.3 billion in net outflows was down sharply from net outflows of $17.6 billion for the prior quarter and $16.7 billion for the year-earlier quarter.
Net income for the quarter came to $28.1 million, down 50% from the prior quarter and 54% lower than the year before. Revenues, meanwhile, came to $627 million, down 6.4% from the prior quarter and down 13% from the year before.
On a conference call with analysts Friday, Mark Fetting, Legg Mason's chairman and CEO, said despite a volatile market environment that weighed on Legg Mason's AUM, the company's core business fundamentals have held up well. He noted that the streamlining initiative Legg Mason launched in May 2010 is now largely complete and should increasingly pay dividends for the company, after accounting for the “considerable transition costs” of the latest quarter.