Feb 11 Vocal Legg Mason Inc shareholder
Mario Gabelli on Monday said he is bullish about the asset
manager no matter who the next chief executive turns out to be
when the board announces its choice as soon as this week.
In a telephone interview Gabelli, pronounced himself
agnostic about whether the next CEO should restructure Legg
Mason, as some have suggested, or whether it would be best kept
intact to benefit from improved fund performance lately.
Gabelli said either choice could make sense for the
Baltimore firm. "I could go either way," Gabelli said. "They
don't have to do anything to make the shareholders happy."
Legg Mason on Monday also reported total assets under
management of $654 billion at January 31. Shares in Legg Mason
were up 1 percent in afternoon trading to $27.50. Unlike shares
of some competitors, they have not bounced back after the
financial crisis and have been stuck below $30 since 2011.
The company has been searching for a new CEO since Mark
Fetting stepped down under pressure at the start of October.
Interim CEO Joseph Sullivan is seen as the favorite among some
employees, but the board at least has considered several outside
candidates as well.
Last week Brian Murdock, outgoing CEO of Toronto-Dominion
Bank's asset management unit, told Reuters he had been
approached about the Legg Mason job but will not be joining the
Legg Mason could make its choice public as soon as
Wednesday, said a person familiar with the matter, speaking on
condition of anonymity because the comments were not authorized.
Sullivan said on the company's earning call on Feb. 1 that
investors could expect it to name a new CEO "in the not too
Gabelli spoke after a securities filing on Monday showed his
Gamco Investors Inc and affiliates now own just over 5 percent
of Legg Mason, with a total of 6.6 million shares. Together that
would make them the fifth-largest shareholder of Legg Mason
according to filings tracked by Thomson Reuters' Thomson One
Gabelli said the filing was made to reflect just incremental
purchases of Legg Mason shares. But he said he began "nibbling
again" at the shares because of progress like improved fund
performance at its Western Asset Management bond unit and
because rising stock markets should benefit the company.
Gabelli said he did not know details of who Legg Mason might
pick as its next CEO. One option, he said would be to pick an
executive to tackle management challenges such as the different
financial arrangements that exist between Legg Mason's eight
main investment affiliates.
Such a leader "would come in and talk to the troops and work
on all the fragmented ownership, figure out how to sell (funds)
better and use the cash flow to keep strengthening the stock,"
Alternatively, Gabelli said, Legg Mason could bring in
someone to do a strategic transaction such as breaking up the
company or selling it.
Gabelli added he does not know the agenda of activist
investor Nelson Peltz, who sits on Legg Mason's board and owns
about 10 percent of its stock. "He's a good guy to stir the pot
and make some money," Gabelli said of Peltz.