Legg Mason today reported operation results for the quarter ended March 31, the first full quarter to be completed since the company's acquisitions of Citigroup Asset Management (CAM) and The Permal Group, both of which closed in the final months of 2005.

Assets under management reached a record $867.6 billion, up $16.8 billion from December 31, 2005. In its press release, Legg Mason attributed the rise to positive market returns, and pointed to net client inflows of $1.6 billion for the quarter.

Naturally, last year's major acquisitions have changed the playing field for Legg Mason -- assets under management as of March 31, 2005 were only $374.5 billion, for example -- and chairman and chief executive Raymond "Chip" Mason" acknowledged this in a statement regarding the figures.

"Financial results will continue to be confusing as we go through the process of employee reductions, redundancy, dual systems, stay bonuses and adjusting to our new size," he said. He projected that it would not be possible until the September quarter to point to results "that reflect our actual and future earnings capacity."

Nonetheless, he said, Legg Mason is on target to complete the integration within its timetable. Mason cited positive asset flows for most of the firm's primary asset managers during the quarter as another good sign.

"Permal, percentage-wise, was very strong. Brandywine, Royce, Legg Mason Capital Management, and legacy Western Asset Management had very solid positive net asset flows."  

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