Demonstrating the sound business structure behind its multi-affiliate model, Legg Mason Inc. has reported net income of US$51.4 million on revenues of US$715.2 million in the December quarter, 2016.
The latest quarterly results compared with net loss of US$138.6 million in the December quarter of 2015 and a profit of US$66.4 million in the September quarter of 2016. The revenue figure compares with US$659.6 million in the December quarter of 2015 and US$748.4 million in the September quarter last.
Legg Mason’s business model involves nine separate active funds management firms encompassing the full range of asset classes and styles. Total assets under management were US$710.4 billion as at the end of December.
Joseph A. Sullivan, Chairman and CEO of Legg Mason said: “During the quarter, Legg Mason delivered operating results that were in line with market expectations, after excluding some non-cash charges, while continuing to drive strategic progress despite significant industry headwinds. The Company’s operating results reflect higher non-pass through performance fees for the quarter and our continued focus on managing costs. Outflows for the quarter were impacted by challenging industry trends for active managers and driven by US equity and alternative strategies, partially offset by fixed income inflows. Investment performance improved during the quarter, and Legg Mason’s global distribution platform had positive net flows for the twelfth time in the last thirteen quarters.
“We remain focused on continuing to expand choice for our clients through product innovation, translating our investment capabilities from legacy and new managers into new products and vehicles that meet evolving investor needs. Additionally, we will continue developing technology to further support our distribution partners, as they look to better serve clients.
“Going forward, we see significant opportunity for active asset managers who provide distinct investment styles and who embrace the need to evolve their business models to better serve clients.”
The Australian business, performed well over the period, according to Andy Sowerby, Managing Director of Legg Mason Australia.
He said that a combination of new products and strong investment performance contributed to strong asset growth in both wholesale and institutional segments.
“Both for the past quarter and for the year in full we had many standout performers across our fund range. This was true for Australian equity and bond strategies alongside our global equity, global bond and multi-asset offerings. Our investment affiliates, including Western Asset, Brandywine Global, QS Investors and Martin Currie all showed their resilience and the power of our multi-affiliate model in a difficult market climate.”
Mr Sowerby added that it was important for fund managers to make a reasonable return on capital for their shareholders, so they could continue to reinvest in their businesses and provide optimum performance for their clients.
“In this vain the local business continues to invest with for growth having announced plans to open a new Sydney office alongside recruiting in both its sales and marketing teams,” said Mr Sowerby.
About Legg Mason
Legg Mason is one of the world’s largest funds management groups, with a history that dates back to 1899. The firm is listed on the New York Stock Exchange and employs approximately 3,100 employees in 31 offices worldwide.
One of Legg Mason’s most distinguishing characteristics is its global multi-affiliate model. Legg Mason provides a global platform and centralised business and distribution support for its nine affiliated fund managers that include: Brandywine, Clarion Partners, Clearbridge, EntrustPermal, Martin Currie, RARE (in addition to its own domestic distribution), Royce & Associates, QS Investors and Western Asset. Each affiliate operates independently under its own brand and investment process, and is considered an industry expert in its asset class. Legg Mason offers a diverse set of investment solutions across institutional, wealth management and direct investor channels, covering a range of asset classes including Australian equities, global equities, fixed income, real assets, income, alternatives, emerging markets, direct lending and multi-asset products.
Simrita Virk at Shed Media
Legg Mason Asset Management Australia Limited (ABN 76 004 835 849 AFSL 240827) is part of the Global Legg Mason Inc. group. Any reference to ‘Legg Mason Australia’ is a reference to Legg Mason Asset Management Australia Limited. Before making an investment decision you need to consider, with or without the assistance of a financial advisor, whether such an investment is appropriate in light of your particular investment needs, objectives and financial circumstances. Neither Legg Mason Australia, nor any of its related parties, guarantees the performance or the return of capital invested. Past performance is not necessarily indicative of future performance. Investments are subject to risks, including, but not limited to, possible delays in payments and loss of income or capital invested. These opinions are subject to change without notice and do not constitute investment advice or recommendation.