Legg Mason’s Global Distribution Momentum Continues
Legg Mason Beats Estimates for Fiscal 4Q15 and Annual Earnings (Part 3 of 5)
Leveraging on distribution
On May 1, Legg Mason (LM) announced a 9% decrease last quarter in gross sales for global distribution, which reflects the decline in demand for investments in funds during the first quarter of calendar year 2015. However, for the full year, the gross sales increased by 27% to $82.5 billion, backed by a strong distribution of equity and debt products in calendar year 2014.
The company’s net sales also increased to $19.3 billion in fiscal 2015 as compared to negative $0.1 billion in fiscal 2014. Major funds driving the gross sales include Western Asset Core Plus Bond Fund, ClearBridge Aggressive Growth Fund, Legg Mason ClearBridge US Aggressive Growth Fund, LM WA Macro Opportunities Bond Fund, and the Western Asset Core Bond Fund.
Investments in distribution
Legg Mason’s CEO, Joseph A. Sullivan, said in the company’s May 1 press release, “Our global retail distribution platform also showed continued momentum, as we expanded market share across a number of categories and channels and recorded positive flows in all of our regions.”
Legg Mason Global Distribution manages assets totaling $278 billion as of March 31, 2015, as compared to $252 billion in the previous year. The company received net positive flows for the sixth consecutive quarter in the US as well as globally. The redemption rate for the US was lower at 21% when compared with 25% globally.
Legg Mason is looking to invest further in its distribution capabilities to increase its number of distribution offices across the globe.
Among the other companies that form part of the Financial Select Sector SPDR Fund (XLF), T. Rowe Price (TROW) generated 8% growth in its revenues, KKR (KKR) reported 6.4% growth, and Janus Capital (JNS) reported 14% growth for the quarter ended March 31, 2015.
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