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Macroeconomic Factors Impact Legg Mason’s Assets Under Management

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Inflows for debt funds

Legg Mason (LM) announced on May 1 that its assets under management (or AUM) were down by 1% to $702.7 billion when compared with the previous quarter. The company’s assets under management were positively impacted by new capital commitments of $6.2 billion and market appreciation of $2.7 billion.

The positive change was offset by liquidity outflows of $15.3 billion, mainly due to investors withdrawing from various liquidity funds throughout the quarter. The long-term inflows were in the fixed income category, totaling $7.6 billion, offset by net outflows from equity funds of $1.4 billion.

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Major investments from the US

Legg Mason gets the majority of its funds for management domestically. The US accounts for 64% of the total AUM. When reviewed from the product category, equity constitutes 28%, debt constitutes 54%, and liquid funds constitute 18% of the total AUM. Institutional clients contribute almost 74% of the total AUM, while the remaining is contributed by retail clients.

Among its subsidiaries, Brandywine Global and Martin Currie witnessed the highest growth of 5% in their AUM when compared with the previous quarter. Royce & Associates’ total AUM declined by 8%, followed by a 4% decline for Permal, and 2% for Western Asset Management.

Legg Mason manages sizable assets in comparison to other asset management companies like BlackRock (BLK) at $3.80 trillion, T. Rowe Price (TROW) at $773 billion, and Janus Capital (JNS) at $186 billion. The company also faces competition from other traditional asset managers forming part of the Financial Select Sector SPDR Fund (XLF).

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