In the Wednesday earnings statement for the most recent quarter — the second quarter of Legg Mason's 2019 fiscal year — the company reported total net inflows of $2 billion, compared to net outflows of $3.8 billion in the previous quarter and net outflows of $2 billion in the quarter ended Sept. 30, 2017.
By asset class, equity strategies had net outflows of $1.1 billion in the quarter ended Sept. 30 vs. net outflows of $2.2 billion in the three months ended June 30 and net outflows of $2.4 billion a year earlier.
Fixed-income strategies had net outflows of $500 million in the quarter ended Sept. 30, net inflows of $1.3 billion in the prior quarter and net inflows of $900 million in the third quarter 2017.
Net inflows to alternative investment strategies were $600 million in the three months ended Sept. 30, compared with holding flat in the second quarter and net outflows in the quarter ended Sept. 30, 2017, of $700 million.
Liquidity vehicles experienced net inflows of $3 billion in the quarter ended Sept. 30 compared to net outflows of $2.9 billion in the second quarter of 2018 and net inflows of $200 million a year earlier.
Legg Mason restated net inflows and outflows for the quarter ended Sept. 30, 2017, in the earnings report.
Positive net flows in alternative investment strategies in the third quarter were driven by growth in the AUM of Clarion Partners, the firm's real estate affiliate, which produced positive net inflows in the past nine quarters, said Joseph A. Sullivan, Legg Mason (LM)'s chairman and CEO, on a call with analysts Wednesday.
Mr. Sullivan said the firm's hedge funds-of-funds boutique, EntrustPermal, also produced positive net inflows in the quarter ended Sept. 30 and has attracted a healthy pipeline of unfunded mandates.
Mr. Sullivan also drew analysts' attention to the $15 billion pipeline of aggregate unfunded wins and uncalled capital from its 10 investment management subsidiaries. He said most of the unfunded mandates in the new business pipeline are from institutional investors.
Assets under management in equities were $214.5 billion as of Sept. 30, up 3.9% compared to June 30 and up 6.6% from the year earlier.
Fixed-income assets totaled $411 billion at the end of the Sept. 30 quarter, down 0.3% from the end of the second quarter and down 0.2% from a year earlier.
Alternative asset strategies were $67.4 billion as of Sept. 30, up 1.5% from the previous quarter and up 2.4% compared to the third quarter the previous year.
At $62.5 billion, Legg Mason's liquidity assets were up 5% from the prior quarter and down 17.2% compared to the same quarter in 2017.
Legg Mason's third-quarter 2018 revenue was $758.4 million, down 1.3% from the third quarter 2017.
Net income was $72.8 million in the three months ended Sept. 30, down 3.8% from a year earlier.