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Legg Mason AUM Rises in October, Fixed Income Inflows Recorded

Zacks Equity Research

Legg Mason Inc. LM reported marginal growth in assets under management (AUM) as of Oct 31, 2019, from the previous month. Preliminary month-end AUM came in at $791 billion, up 1.2% from the September 2019 figure of $781.8 billion.

The company’s October AUM displayed $1.8-billion fixed income inflows and alternative inflows of $0.3 billion, partly offset by liquidity and equity net outflows of $1.4 billion and $0.1 billion, respectively. Notably, alternative AUM recorded $0.2 billion of realizations. Further, positive foreign-exchange impact of $2.1 billion was a favorable factor.

Legg Mason’s equity AUM at the end of October advanced 1.9% from the prior-month figure to $207.1 billion. Fixed income AUM was up 1.5% sequentially to $449.3 billion. In addition, alternative assets increased marginally to $72.7 billion.

Rise in fixed income, equity and alternative AUM resulted in long-term AUM of $729.1 billion. The figure marks a 1.5% increase from the previous month. However, liquid assets, which are convertible into cash, were down 2.1% to $61.9 billion.

Our Viewpoint

Legg Mason has the potential to outperform its peers over the long run, backed by a diversified product mix and leverage to the changing market demography. Nonetheless, absence of continued growth in equity markets and foreign-exchange fluctuations remain headwinds.

Shares of the company have gained around 10.1% over the last three months compared with 11.6% growth recorded by the industry.

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