He said investment performance is Legg's highest priority. The company's assets under management dropped to $665 million at the end of January, from $698.2 billion Dec. 31.
But Fetting said client outflows in January were significantly less than the prior quarter, with that trend continuing in February.
"We're not out of the woods yet, but we're encouraged," he said.
With yesterday's SIV sale, Legg expects $500 million in a tax refund in the summer, which could be used to pay debt or other corporate actions.
After receiving the tax refund, Legg said it will have $1 billion in cash beyond what it needs to run the business.
Morningstar analyst Alan Rambaldini said Legg can now concentrate on improving its core business after spending so much time and effort to resolve its SIV issue.
"That's doing well by your investors and getting assets under management growing again," he said. "And it doesn't hurt that they have a billion dollars of free cash to spend either to try to improve operations or reduce debt or buy back shares."
At its peak, Legg's SIV exposure in its money market funds was $10 billion in October 2007. Legg's money market funds carry $156 billion in assets.
