Legg Mason Inc.
) reported a marginal increase in its assets under management
(AUM) in Jan 2013 from the prior month.
Preliminary quarter-end AUM came in at $654.1 billion, up 0.8%
sequentially. Fixed Income AUM was down in the month under
review, though liquidity AUM and Equity AUM advanced.
Legg Mason's equity AUM, as of January-end, increased 4.0% from
the prior month to $151.3 billion while fixed income AUM dipped
0.4% from the prior month to $365.7 billion.
The rise in equity was partially offset by a fall in fixed income
AUM, which resulted in long-term AUM of $517.0 billion,
reflecting a 0.9% rise from the prior month. Morever, liquid
assets, which are convertible into cash, inched up 0.5% to $137.1
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. Besides, average AUM was $648.3
billion compared with $622.0 billion in the prior-year quarter.
Performance of Other Asset Managers
) recorded a rise in its preliminary month-end AUM for Jan 2013.
The AUM for the month stood at $712.6 billion compared with
$687.7 billion at the end of Dec 2012. Favorable market returns
as well as surge in both active and passive long-term inflows
were the primary reasons for the rise. However, foreign exchange
was responsible for a $3.0 billion drop in AUM.
Franklin Resources Inc.
) declared preliminary AUM of $809.8 billion for its subsidiaries
in Jan 2013. The company's results witnessed a 3.6% rise from
$781.8 billion as of Dec 31, 2012. Moreover, it increased 15.0%
from $704.3 billion as of Jan 31, 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, we expect operating efficiencies to
improve and dividend payments to continue enhancing investors'
confidence in the stock.
FRANKLIN RESOUR (BEN): Free Stock Analysis
INVESCO LTD (IVZ): Free Stock Analysis Report
LAZARD LTD (LAZ): Free Stock Analysis Report
LEGG MASON INC (LM): Free Stock Analysis
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Legg Mason currently retains a Zacks #2 Rank (Buy). Other asset
mangers that are performing well include
), which also carries a Zacks Rank #2.