Legg Mason to Name Sullivan CEO, Kass to Board: Sources
General Assignment Reporter
As Legg Mason moves to restock its executive and board ranks, the asset manager is said to tap insider Joseph Sullivan as chief executive and Dennis Kass as a board member, according to people familiar with the matter.
Sullivan has been serving as Legg Mason's interim CEO since Mark Fetting stepped down in October 2012, and his appointment to the permanent role could be announced as soon as Wednesday, these people say.
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At the same time, the Legg Mason board is expected to announce the appointment of Kass, who currently serves as the chairman of Jennison Associates after stepping down as Jennison's CEO last year.
More appointments to the board are expected throughout the, year as Legg Mason begins its turnaround under Sullivan and continues fending off investor pressure, according to one of the people.
Nelson Peltz's Trian Partners currently holds a 9.5 percent stake and a board seat; Mario Gabelli's GAMCO recently filed that it owns a 5.2 percent stake as well.
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Legg Mason spokesperson Mary Athridge declined to comment.
Kass will bring institutional asset management expertise to a firm dogged by a lack of strategy and heavy investor outflows. Legg's $648.6 billion under management is down sharply from its peak of $1 trillion in 2007, with steady outflows since then. By contrast, Jennison's $156 billion under management at the end of 2012 represented a 23 percent rise from a year earlier.
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Net client withdrawals at Legg Mason totaled $7.5 billion in its fiscal third quarter, ended Dec. 31, in which the company posted a net loss of
$453.9 million, or $3.45 per share.
At the time of announcement, Nomura analyst Glenn Schorr wrote that the earnings were but "further proof of how difficult turnarounds are" for such companies that have already lost investor momentum.