* CFO says executives, board "prepared to modify" strategy
* Nachtwey speaks as firm seeks CEO to set direction
Nov 13 Money manager Legg Mason Inc,
which has eight main investment subsidiaries, is reviewing its
business strategy and is "prepared to modify it as appropriate,"
Chief Financial Officer Pete Nachtwey said on Tuesday.
Legg Mason, which is the fourth-largest publicly traded U.S.
fund manager, has been roiled by customer outflows and mixed
investment performance over the past few years and is currently
searching for a new chief executive. Some of Legg Mason's
subsidiaries have been displeased with the parent company's
sales efforts.[ID: nL1E8LOMN4]
"We are reviewing and evaluating our current business
strategy with our affiliate leadership and our board and are
prepared to modify it as appropriate," Nachtwey said at the Bank
of America Merrill Lynch Banking and Financial Services
Conference in New York, which was webcast.
Still, the Baltimore-based firm, with $646 billion under
management at the end of October, is well-positioned to grow and
has "significant strengths we think are sometimes
under-appreciated," Nachtwey said.
Shares of Legg Mason closed down 0.6 percent at $25.00 on
the New York Stock exchange on Tuesday. The shares have lost 5.2
percent so far this year.
The firm's previous CEO, Mark Fetting, stepped down at the
start of October amid internal disagreements over the
relationship between the parent and its affiliated investment
managers, such as its Western Asset Management bond unit and its
ClearBridge Advisors equity unit.
Some have urged a breakup of the company, though it is not
clear that would benefit shareholders who own stock that has
been stuck around a quarter of its value in 2007, before the
Legg Mason's board also includes the activist investor
Nelson Peltz, who owns a roughly 10 percent stake in the company
under ownership restrictions that end on Nov. 15. He has not
commented on his intentions toward Legg Mason after that date.
Nachtwey did not address Peltz's ownership or the CEO
Nachtwey defended current arrangements in which Legg Mason
owns its affiliates outright but has different revenue-sharing
agreements with each.
Asked if the company might make the arrangements all the
same, Nachtwey said a more likely path would be for an affiliate
to sell the parent company a higher percentage of its revenue
The company is still focused on growth, he said, and
reiterated past comments that Legg Mason would be most
interested in acquiring shops that specialize in international
assets, equities or alternative investment areas.