Baltimore-based asset manager Legg Mason reported a 25 percent drop in quarterly earnings Thursday, driven by investment losses and a wider outflow of client cash amid volatile stock markets.

Assets under management were $611.8 billion at the end of September, down from $662.5 billion at June 30, a decline the company said was mainly due to $32.9 billion in market depreciation in the quarter.

Legg Mason's results, like those of rivals, also were shaken by rattled investors, and outflows grew to $17.6 billion from $3.7 billion in the June quarter.

Most noteworthy, the outflows included $8.8 billion from Legg Mason's fixed-income funds, which might have been expected to lose less amid the volatility.

"The fixed-income side was a little bit of a surprise," said Stifel Nicolaus & Co analyst Jeffrey Hopson. He had expected outflows of around $8 billion for the company as a whole.

For its second quarter ended Sept. 30, Legg Mason said net income fell to $56.7 million, or 39 cents per share, from $75.3 million, or 50 cents per share, a year earlier.

Analysts on average expected earnings of 37 cents per share, according to Thomson Reuters.

Both periods included tax benefits, but the latest quarter also included $19.7 million in corporate investment losses. These were mainly mark-to-market losses on seed investments such as money put into new funds, a spokeswoman said.

Chief Executive Officer Mark Fetting said in a statement that Legg Mason's asset mix helped it avoid an even greater decline in total assets.

Last year Fetting began a broad restructuring aimed at cutting costs. Activist investor Nelson Peltz, a Legg Mason board member and major shareholder, has been focusing more on financial firms in addition to the stakes he has taken in food companies.

Now Fetting is under pressure to reverse the continuing outflows. Shares of Legg Mason have fallen 28 percent so far this year, compared with a 23 percent decline in the Dow Jones index of U.S. asset managers.