Legg Mason's annus horribilis Thursday, January 29, 2009
Image via WikipediaLegg Mason has experienced an awful year. In 12months
- Its' money market funds had to be significantly propped up to prevent them "breaking the buck"
- Star manager Bill Miller had a collapse in performance after 15 years of consistent out-performance, albeit many of those gains have now been wiped out
- assets under management have fallen to less than $700bn, 30% lower than a year ago
- it has just reported a $1.5bn loss for the last quarter to produce the worst results in 25 years
Unsurprisingly, its' shares has fallen by about 70% over the year.
Legg aren't alone in being battered by market conditions, but being one of the largest fund management firms makes the impact looks much larger.
You have to have some sympathy for Mark Fetting, Legg's Chief Executive. He only took over in January 2008, inheriting the reins from "Chip" Mason, who had led the firm for the previous 46 years, and who also stepped down as Chairman in December 2008 in favour of Fetting. Yet, as Napolean said, "give me lucky Generals" and Mason will be known as the successful Patriarch whilst Fetting will be the CEO who oversaw the downturn in the firm's fortunes. Indeed, if it was a movie script, you can imagine Chip being called out of retirement in 18 months time to "save the day and rescue the firm".
I've commented on Legg previously here, here, here, and here.