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Money Management

Legg Mason assets up 4.2% for quarter, relatively flat over year

Legg Mason (LM) on Monday reported $758 billion in assets under management as of March 31, up 4.2% from Dec. 31 and up 0.5% from a year prior.

During the three months ended March 31, which is Legg Mason's fiscal fourth quarter, the company experienced "break-even long-term flows," as equity outflows offset inflows into fixed-income and alternative strategies during the period, an earnings release said. In comparison, the company had long-term net outflows of $8.5 billion in the previous quarter, and net long-term inflows of $1.2 billion for the three months ended March 31, 2018.

"This quarter's results reinforce the benefits of diversification of our investment management platform across asset classes, with alternative and fixed-income net inflows offset by decelerating equity net outflows," Joseph A. Sullivan, chairman and CEO of Legg Mason, said in a statement in the earnings release. "Our distribution platform contributed with a favorable inflection in retail net flows reflecting higher sales and slower redemptions. We continue to focus on meeting evolving client demand by expanding client choice in investment strategies, vehicles and distribution access. Looking ahead, lead indicators of improving investment performance, ongoing product development, and increasing interest in alternative strategies bode well for organic growth prospects," he said.

Across its equity strategies, Legg Mason (LM) had net outflows of $1 billion, compared to net outflows of $3.3 billion during the quarter ended Dec. 31, and net outflows of $2.1 billion for the year-earlier quarter.

Fixed-income strategies saw $100 million in net inflows during the quarter ended March 31, vs $5.1 billion in net outflows the previous quarter and $2.8 billion in net inflows during three months ended March 31, 2018.

Alternative strategies also saw net inflows, totaling $900 million during the quarter ended March 31, compared to $100 million in net outflows in the previous quarter and $500 million in net inflows in the year-earlier quarter.

Liquidity vehicles experienced $8.1 billion in net outflows in the quarter ended March 31, vs. $10.5 billion in net inflows during the three months ended Dec. 31 and $10.7 billion in net outflows during the year-earlier quarter.

As of March 31, assets in equity strategies were $202 billion, up 11.6% from the previous quarter and down a slight 0.5% from March 31, 2018.

Fixed-income AUM was $419.6 billion, up 3.2% from Dec. 31 and up 0.6% from a year earlier.

Alternative strategies had $68.6 billion in assets as of March 31, up 3.5% from the prior quarter and up 3.8% from a year prior.

Liquidity assets were down 7.5% from the end of the previous quarter, however, at $67.8 billion as of March 31. Liquidity assets increased by 8.1% over a year earlier.

Legg Mason's revenue for its fourth fiscal quarter was $692.6 million, down 1.7% from the previous quarter and down 11.8% from the quarter ended March 31, 2018.

The firm reported net income of $49.5 million in the three months ended March 31, compared to a net loss of $216.9 million in the prior quarter and net income of $9.3 million during the year-earlier quarter.