US - Legg Mason, which is preparing to takeover the assets of Citigroup Asset Management, reported net income of $121m today, up 32% on Q3, 2004.
Strong growth in assets under management experienced by each of the three asset management divisions –Institutional, Mutual Funds and Wealth Management – over the last 12 months resulted in strong growth in fee revenues.
Raymond A. Chip Mason (pictured), chairman and CEO, Legg Mason, said results from fixed income manager, Western Asset were the most noteworthy, with the firm's net client cash flows during the quarter totalling more than 5% of its assets under management at the beginning of the quarter.
Assets under management as of 30 September, 2005 totalled $416bn, an increase of $105.6bn, or 34%, from $311.0bn a year ago.
Net client cash flows of $71.7bn were responsible for 68% of the increase, with market performance – including currency translation – accounting for 28% and the December 2004 acquisition of the business of Legg Mason Investment Counsel accounting for the remainder.
With the Citigroup deal, assets under management at Legg Mason are set to grow to $830bn.
Uncertainty, however, remains as to how Legg will split and integrate the Citigroup business once the deal closes. Of particular interest is the future of Citigroup’s fixed income business, headed up by Peter Wilby.
Legg Mason brought in ex-Fidelity manager, Brian Posner, this month to head up the equity business Legg is acquiring from Citigroup.
Last week Citigroup, which has faced a mild revolt from some mutual fund shareholders over the deal, said that it is now on target to close its transaction by 1 December, 2005.
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