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Rating:Reuters Jumps On the Legg Mason Breakup Bandwagon Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, October 19, 2012

Reuters Jumps On the Legg Mason Breakup Bandwagon

News summary by MFWire's editors

The possible break up of Legg Mason [profile] may not be on par with the fall of the Roman empire, but it is catching attention nonetheless. And private equity players may be interested in the deal.

Yesterday Reuters ran a story pondering the the possibility of a private equity-backed breakup of Legg Mason. That story came after MFWire ran a story exploring the same such possibility on Tuesday.

"I could imagine a number of the affiliates considering private equity at this juncture," is the takeaway quote in the Reuters coverage. The man quoted is Charles Burkhart, founder of Rosemont Investment Partners.

Propinquity Advisors Roland Meerdter also gets a quote in:

"They have got to figure out what value it is the parent is providing the rest of the organization," he says. "Legg Mason as the holding company has to do a better job of explaining what they're doing to add value."

The article hones in on the independence of Legg's affiliates and the murkiness of how they do business together.
Some affiliates want more help selling funds from Legg Mason's central distribution group. Money sent to central distribution is "like making payments to Rome," said one insider.
"It's very frustrating to do business with this company," adds financial advisor Clifford Caplan.

Reuters reports that Legg Mason's current share price around $25 is roughly one-quarter the level it hit in 2007 thanks to missteps at several of its units during and after the financial crisis.

The article's reporters cite unnamed sources who say that unresolved tensions between the affiliates and Legg Mason headquarters helped lead to CEO Mark Fetting's departure.  

Edited by: Tommy Fernandez


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