AGF Management Ltd. today reported a rise in third-quarter profit “despite short-term volatility and uncertainty in the capital markets.”

The investment fund management company said it earned $39.4 million, or 43¢ per share, in the three months ended Aug. 31. This compared with $34.6 million, or 41¢ per share, in the year-ago period, which benefited from a $13.5-million tax recovery thanks to last year’s federal tax cut.

Third-quarter pre-tax income from continuing operations was up 151% from a year earlier to $57.3 million, as revenue rose to $199.2 million from $146.9 million.

Net sales of long-term funds amounted to $346.5 million during the quarter, compared with $77 million a year earlier.

Assets under management increased 38% year-over-year to $53.8 billion. Institutional and private client assets grew 63% as a result of a strong investment performance, new mandates and the December acquisition of Highstreet Partners with $4.8 billion in assets.

Mutual fund assets rose 23% from a year earlier.

“The markets during the latter part of the third quarter of 2007 proved to be very challenging — stock markets were volatile and credit-related fears weighed on the minds of investors,” chairman and CEO Blake Goldring said in a release.

“Our mutual fund sales remain strong and we continue to be the top-selling non-bank firm in Canada with net sales of long-term funds of $2.3 billion for the fiscal year to date,” he added.