Legg Mason Inc.
) assets under management (AUM) for Feb 2013 marginally increased
from the prior month. Legg Mason's preliminary quarter-end AUM
came in at $661.0 billion, up 0.9% sequentially. Fixed Income AUM
was down in the month under review, though liquidity AUM and
Equity AUM advanced.
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Legg Mason's equity AUM inched up 0.6% from the prior month to
$152.2 billion, while fixed income AUM dipped 0.1% from the prior
month to $365.9 billion.
The marginal rise in equity was partially offset by a fall in
fixed income AUM, which resulted in long-term AUM of $518.1
billion, reflecting a marginal rise of 0.1% from the previous
month. Moreover, liquid assets, which are convertible into cash,
moved up 4.0% to $142.9 billion.
As of Dec 31, 2012, Legg Mason's AUM was $648.9 billion, up 3.0%
year over year from $627.0 billion, driven by market appreciation
of $5.7 billion. Fixed income represented 57.0% of consolidated
AUM as of Dec 31, 2012, liquidity represented 21.0% and equity
During the quarter, liquidity inflows were about $7.6 billion.
However, equity and fixed income outflows were $8.3 billion and
$6.8 billion, respectively. Apart from this, average AUM was
$648.3 billion compared with $622.0 billion in the prior-year
Performance of Other Asset Managers
) also recorded a marginal rise in its preliminary month-end AUM
for Feb 2013. The AUM for the month was $713.8 billion, up 0.2%
from $712.6 billion at the end of Jan 2013. Favorable market
returns as well as a hike in active long-term inflows were the
primary reasons for the rise. Yet, foreign exchange led to a $5.8
billion drop in AUM.
Franklin Resources Inc.
) declared preliminary AUM of $813.8 billion by its subsidiaries
for Feb 2013. The company's results witnessed a rise of 0.5% from
$809.8 billion as of Jan 31, 2013. Moreover, it increased 11.9%
from $727.4 billion as of Feb 29, 2012.
We believe that Legg Mason has the potential to outperform its
peers in the long run based on its diversified product mix and
leverage to the changing market demography. However, in the near
term, assets outflow will remain a significant headwind.
However, owing to the restructuring initiatives and the
cost-cutting measures at Legg Mason, we expect operating
efficiencies to improve and capital deployment efforts to
continue enhancing investors' confidence in the stock.
Legg Mason currently retains a Zacks Rank #2 (Buy). Another asset
) is also performing impressively and carries a Zacks Rank #1