Legg Mason has appointed Mark R. Fetting, 53, as the firm’s president and CEO, with Legg Mason co-founder and Chairman Raymond “Chip” Mason serving as non-executive chairman. Fetting joined Legg Mason in 2000 and has been responsible for the firm’s worldwide mutual fund and managed account businesses. The firm now has some $1 trillion under management.
“Of the many qualified candidates we met, Mark is uniquely qualified to further capture the power of the Legg Mason multi-manager business model and to drive the growth of the company on a global scale,” says Harold L. Adams, who chaired the board’s search committee.
Before joining Legg Mason, Fetting was head of retirement services for Prudential Financial Group. He also has worked for Citibank, Greenwich Associates and T. Rowe Price.
In the third quarter ending December 31, Legg Mason had revenues of $1.19 billion, up 5 percent from $1.13 billion in the third quarter of fiscal 2007. Net income for the quarter was $154.6 million, representing an 11 percent year-over-year decline resulting from a charge of roughly $23 million related to support for asset backed commercial paper (or ABCP) investments held by certain liquidity funds. AUM increased 6 percent to $998.5 billion from the year-ago quarter but fell 1 percent from the previous quarter.
For the past nine months, revenues grew 11 percent to $3.6 billion, while net income expanded 10 percent to $523.1 million.
In the latest quarter, net client cash outflows totaled $9.1 billion and market depreciation $4.0 billion. Equity outflows were $10.6 billion and liquidity outflows were $0.5 billion, while fixed income recorded inflows of $2.0 billion for the quarter, the company says.
As of December 31, some 53 percent of total AUM is in the institutional business, 40 percent in managed investments and 7 percent in wealth management. Assets managed for non-U.S. domiciled clients represented 34 percent of total AUM.
The company says the following business initiatives should contribute to future results:o Legg Mason Capital Management funds are set to be offered in fee-based accounts through Merrill Lynch;o Legg Mason Global Funds are launching in China, through a distribution partnership with Citibank China; the fund family includes products from Legg Mason Capital Management, Western Asset, Brandywine Global Investment, Royce, and Batterymarch; o ClearBridge introduced a 130/30 value strategy and two concentrated portfolios focused on absolute returns;o Permal initiated Permal Investment Partners (US) and Silk Road funds;o Western Asset introduced Levered Loan, the Strategic USD High Yield Portfolio, Investment Grade Long Duration, Non-U.S. Floating Rate High Income Fund, and the SMASh Series Municipal Extended Credit (MEC); ando Legg Mason continues to sign agreements with partners for cross-border funds, including Hartford, Mass Mutual, ING, Morgan Stanley and HSBC.
Legg Mason recently launched the Legg Mason Partners 130/30 U.S. Large Cap Equity Fund, which is subadvised by its subsidiary Batterymarch Financial Management. “After seeing much demand for the 130/30 product among institutional investors, we are excited to roll out a vehicle for retail and smaller institutional investors,” explains Brian Chiappinelli, manager and product specialist for Batterymarch.
Janet Levaux is the managing editor of Research; reach her at email@example.com.