Legg Mason Inc. reported Friday that it lost $453.9 million for the third quarter, due to previously announced non-cash charge of $734 million related to the re-evaluation of certain assets.
On a per share basis, the Baltimore-based money manager lost $3.45. For the corresponding quarter a year ago, the company earned $28.1 million or 20 cents per share.
"We are disappointed with our results this quarter, which were negatively impacted by the significant non-cash impairment charges that we previously announced. However, Legg Mason delivered solid core earnings and, importantly, made good progress on a number of strategic fronts, including announcing the strategic acquisition of Fauchier Partners, which better positions us for growth," interim CEO Joseph A. Sullivan said in a statement.
Legg announced the acquisition of European money manager Fauchier Partners in December, which Legg plans to merge into its affiliate Permal Group in New York. At that time, Legg said it would be taking a non-cash impairment charge related to some domestic mutual fund contracts along with affiliate's Permal funds-of-hedge-funds contracts. That charge totals $734 million, or $508 million after taxes.
Operating revenue for the quarter totaled $673.9 million, a 7 percent increase over a year earlier.
Sullivan said the investment performance of Legg's affiliates has improved, and that the company received approval from the Securities and Exchange Commission to launch an actively managed exchange traded fund.
Legg has struggled for years to stop the outflow of money from its funds. Assets under management for the quarter ended Dec. 31 reached $648.9 billion, down from $650.7 billion three months earlier. In the quarter, investors pulled $7.5 billion from the funds, which was offset by market gains of $5.7 billion.
The company has been operating without a permanent CEO since Oct. 1, when CEO and chairman Mark Fetting stepped down.
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