Asset manager Legg Mason announced Wednesday a 37% jump in profits for the third quarter of 2011, thanks to an increase in fees, but the firm also reported continuing outflows as investors sought to put their money somewhere other than mutual funds.
Profits totaled $61.6 million, or $0.41 per share, compared with $44.9 million, or $0.28, quarterly earnings a year ago. Investors withdrew $12.9 billion from bond funds, $3.3 billion from stock funds and $500 million from money market funds.
In its earnings release for the fiscal third quarter ended Dec. 31, 2010, the Baltimore-based firm said assets under management (AUM) fell to $671.8 billion, from $673.5 billion a year ago. Clients withdrew $16.7 billion, which offset market gains of $14.8 billion.
Fixed income, equity and liquidity outflows were $12.9 billion, $3.3 billion and $0.5 billion, respectively. As of Dec. 31, fixed income represented 53% of AUM, while equity represented 27% and liquidity represented 20%.
Revenues 5% Higher Than a Year Ago
For the third quarter, operating revenues were $721.9 million, up 7% from $674.8 million in the prior quarter, and up 5% from $690.5 million in the prior-year quarter. The higher revenues reflected higher advisory fee yields tied to a more favorable asset mix, the company reported.
Legg Mason on Wednesday also declared a $0.06 per share quarterly cash dividend on its common stock.
Improved operating results for the quarter reflected higher revenues related to a higher advisory fee yield along with stronger performance fees and expense management, said Chairman and CEO Mark Fetting in a statement.
"A progressively healing economy is likely to produce additional market opportunities for investing," Fetting said. "That said, we are focused on the need
