Legg Mason Reports First Quarter Of Inflows Since 2007

Oct 26 2012 | 3:08pm ET

Asset management giant Legg Mason reported net inflows of $200 million in its fiscal second quarter, ended September 30, compared to outflows of $17.6 billion a year earlier.

It's the first time the Baltimore money manager has reported a quarter of net inflows since mid-2007.

On the other hand, the positive result was entirely due to investors moving money into more liquid assets (like money market funds, which gained $9.7 billion in Q3) and out of equities and fixed-income, which lost $5.7 billion and $3.8 billion, respectively, reports the Wall Street Journal. Moreover, Legg Mason warned it expects significant withdrawals this month as investors continue to bail on equities funds.

Assets under management rose to $650.7 billion as of the end of September, up from $631.8 billion at the end of the prior quarter.

Legg Mason reported a profit of $80.8 million, up 43% from the prior year. That gain was thank to seed investments and other non-operating contributions—revenue fell 4.4% to $640.3 million.

The firm, which has been battling poor performance and customer redemptions for several years, has also been in the sights of activist hedge fund Trian Fund Management, its second-largest shareholder, which forced the resignation of former Legg Mason chief executive Mark Fetting in October. Legg Mason says finding a replacement for Fetting could take “several months.”

An agreement barring Trian from raising its 9.5% stake in Legg Mason expires next month.


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