Legg Mason can trace its roots back 113 years.It helped make Baltimore a municipal powerhouse in the first half of the 20th century.
It sponsors a major tennis tournament.
And now, it is trying to dig out from monumental losses.
It’s gotten so bad that when asked about the hit the firm has taken in the past few years, employees go dumb, according to a weekend profile of the firm by Barron’s Beverly Goodman.
From a high of $136.13 in Feb. 2006, Legg’s share price has plummeted to $26. It reached a low of $11 in March 2009.
It’s not entirely alone in its plight — other old-line managers like The Hartford and AllianceBernstein have also seen dismal returns since the crash.But other fund managers have thrived since 2009 — here’s Legg compared with T. Rowe Price:
Photo: Google Finance
Goodman captures the stupefied mood in B’More:
“The CEOs are frank in discussing their [asset management groups], but as soon as the conversation turns to the parent company, words are chosen much more carefully, body language becomes awkward, and faces go poker.”
Most blame Legg’s woes on the ill-advised purchase of Citi’s bond and money-market funds in 2005 and a bad bet on Treasuries after the crash, Goodman writes.
The current CEO Mark Fetting, who grabbed Legg’s reins four years ago, sounds like a capable guy.
But it sounds like he’s going to need more luck than skill to keep the firm together:
“Tensions are high at Legg. And no matter how far-flung or independent the affiliates are, it’s clear everyone is weary of talking about what went wrong, and reticent about discussing relationships with the parent company — at times to the point of obfuscation.”
Good luck, guys.
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