Legg Mason's April AUM Rise on Clarion Partners Acquisition
Legg Mason Inc. LM reported an increase in its assets under management (AUM) for Apr 2016. As of Apr 30, 2016, the Baltimore-based asset management firm’s preliminary AUM improved 5.6% from the prior month to $707.1 billion.
The company’s April AUM increased by around $41.5 billion from the acquisition of Clarion Partners, which was closed on Apr 13. It also reflected a positive foreign exchange impact of about $2.6 billion. However, the month recorded outflows in its fixed income, equity and liquidity of $2.5 billion, $1.4 billion and $6.7 billion, respectively.
Legg Mason’s fixed income AUM increased 1% from the previous month to $375.3 billion. Equity AUM at the end of April was up slightly from the prior month to $162.7 billion.
Long-term AUM increased 7.9% from the prior month to $601.3 billion. Liquid assets, which are convertible to cash, decreased 5.8% to $105.8 billion.
Our Viewpoint
We believe that Legg Mason has the potential to outperform its peers in the long run, given its diversified product mix and leverage to the changing market demographics. Further, with strategic acquisitions, restructuring initiatives and cost-cutting measures, operating efficiencies should improve and steady capital deployment activities are expected to continue boosting investors’ confidence in the stock.
Currently, Legg Mason carries a Zacks Rank #3 (Hold). Cohen & Steers Inc. CNS is a better-ranked company in the finance industry, sporting a Zacks Rank #1 (Strong Buy).
Among other investment managers, Invesco Ltd.’s IVZ preliminary month-end AUM came in at $783.7 billion for Apr 2016, reflecting a sequential rise of 1.6%. Moreover, Franklin Resources Inc. BEN declared preliminary AUM of $747.1 billion by its subsidiaries for Apr 2016, exhibiting 1% sequntial growth.
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