NEW YORK (Reuters) – Nelson Peltzs’ Trian Fund Administration LP could push Legg Mason Inc. to implement modifications to spice up returns, an individual accustomed to the matter stated on Tuesday, the second time in 10 years that Trian has focused the mutual fund firm.
FILE PHOTO: Nelson Peltz founding accomplice of Trian Fund Administration LP. converse on the WSJD Stay convention in Laguna Seashore, California October 25, 2016. REUTERS/Mike Blake/File Picture
The 2 sides have mentioned reducing prices, the supply stated, and Legg Mason chairman, president and chief govt officer Joseph Sullivan stated on an earnings name on Monday that the corporate plans to handle prices extra successfully to enhance profitability.
Legg Mason’s share worth has fallen 15.5 p.c within the final yr. Ranked as one of many nation’s 30 greatest mutual fund companies, the corporate reported $758 billion in belongings beneath administration on the finish of the fiscal yr, which resulted in March, up from $754.1 billion a yr earlier.
Like many different mutual fund companies, Legg Mason has been hit exhausting by buyers’ shifting tastes for cheaper index funds supplied by bigger companies, together with Vanguard Group.
Representatives for Trian and Legg Mason may both not be reached for remark or declined to remark.
Trian’s discussions with Legg Mason have been first reported by the Wall Avenue Journal.
It was not instantly clear whether or not Trian would resort to a proxy contest to push its calls for or whether or not the 2 sides may discover one other decision.
Peltz first set his sights on the Baltimore-based firm ten years in the past and ended up being supplied a seat on the board, which he held till late 2014.
Throughout Peltz’ tenure as a director, Legg Mason appointed Sullivan as CEO, changing Mark Fetting who served for 4 years.
Earlier this yr Trian stopped wanting mounting a board problem at PPG Industries Inc. after the U.S. paints and coatings firm met a few of Trian’s calls for and introduced new monetary targets.
Trian’s largest investments are Common Electrical Co and Procter & Gamble, the place the hedge fund has board seats.
Reporting by Svea Herbst-Bayliss; Modifying by Sonya Hepinstall