Legg Fund Of Funds Booms

Jul 24 2007 | 11:06am ET

Legg Mason’s flagship mutual funds have taken a beating, but the firm is still flying high, thanks to its fund of hedge funds business.

Baltimore-based Legg said its fiscal first-quarter profit jumped 22% to $191 million, as fees earned by its Permal Group unit more than tripled. By contrast, its stock mutual funds suffered a fifth straight quarter of redemptions, as investors pulled some $7 billion.

Legg bought Permal just nine months ago, and has seen its assets under management double to $35 billion since then. Permal brought in $54 million in performance fees last quarter; Legg’s total fund fee revenue rose just 19% to $577 million.

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