Legg CFO says company might trim laggard funds and reduce office space

Company expects to hold investor day in June

March 05, 2013|By Eileen Ambrose, The Baltimore Sun

Legg Mason Inc. might eliminate some of its less popular investment funds and some of its 32 offices as it continues to look at ways to operate more efficiently, the chief financial officer of the Baltimore-based money manager said Tuesday.

CFO Pete Nachtwey comments about cost-cutting came in response to a question at a Citigroup financial conference in Boston.

He said Legg now has more than 400 funds, and many of them haven't attracted sufficient assets. Those might be merged into other Legg funds or the money returned to investors in a move that also will "decrease the complexity of our fund complex," Nachtwey said.

Meanwhile, Legg continues to fill gaps in its investment offerings, launching 15 funds since last April and seeking to add active exchange-traded funds and alternative investments.

In 2010, Legg launched a cost-savings program that saved more than $140 million annually. That program also eliminated about 800 positions at the corporate level, leaving about 1,000 staffers there. "We feel we're at the right place at that level," he said.

The company employs about 3,000 people spread among 32 offices worldwide. "Do we need to be in 32 offices?" Nachtwey said. In recent months, Legg began downsizing some of its office space, a move that will save the company $10 million annually, he said.

Nachtwey's comments come three weeks after Legg named Joseph A. Sullivan as its CEO and president. The company expects to hold an investor day possibly in June in New York, where Sullivan is expected to lay out his plans for Legg.

Legg's stock rose to near a 52-week high, closing Tuesday at $29.18 a share, up 81 cents each.

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