Joseph A. Sullivan, who has served as interim leader of Legg Mason Inc. for more than four months, has been named CEO and president of the Baltimore-based money manager, the company announced this morning.
Sullivan, 55, rejoined Legg in 2008 and prior to his interim appointment served as the head of global distribution.
He faces some stiff challenges, including boosting the company's languishing stock price and stemming an outflow of money from its mutual funds.
"The other side of challenges are opportunities," Sullivan said in an interview Wednesday morning, noting that Legg has products across many asset classes and worldwide distribution. "We have a foundation that is very, very strong, and I would say, enviable. We need to make it all work better than we have."
Sullivan said he plans work with the board and Legg's affiliates to "craft a vision of what needs to happen for Legg Mason to win in the future."
He added that this doesn't mean a 180-degree turnabout at Legg.
One of Sullivan's goals is to fill gaps in Legg's investment line-up. That includes addinig international or emerging market equity management or alternative strategies, such as real estate and natural resources, Sullivan said.
The new CEO said Legg may fill those vacancies through a new stand-alone affiliate or by buying another asset manager and folding that into an existing Legg subsidiary.
Sullivan replaces former chairman and chief executive Mark R. Fetting, who stepped down Oct. 1 after less than five years at the helm. His departure, analysts said, was advocated internally by Legg director and activist shareholder Nelson Peltz, whose company is Legg's second largest shareholder.
Legg hired executive recruiter Korn/Ferry International to aid in its search for a new CEO.
Legg Chairman W. Allen Reed, who led the board's search for a permanent CEO, said Wednesday that Korn/Ferry conducted a global search for candidates with the specific traits sought in a new leader. The board's search committee wanted an industry veteran who had the management skills to collaborate with Legg's various affiliates and help them grow.
Korn/Ferry came up with a "very long list" of prospects, that the board's search committee reviewed and culled, Reed said.
But as months went by with no permanent CEO, analysts and industry experts speculated that no outsider wanted the job of leading Legg, which has an unusual structure. Legg has affiliates in other states that operate independently of the parent company. According to some published reports, the affiliates have been unhappy with the marketing and other support they have received from headquarters.
It's not difficult to manage the affiliates but "it's different to manage," Reed said. "That does reduce the number of candidates that really have the experience to do the job."
The affiliates had input into the selection of the new CEO, Reed said. He added that no one turned Legg down for the job, but ultimately the board chose Sullivan who did an "excellent job as interim CEO."
During the past four months, Sullivan oversaw the acquisition of a European money manager, Fauchier Partners, as well as the move to merge the Baltimore-based Legg Mason Capital Management unit into a Legg affiliate in New York. He also restructured the revenue-sharing agreement with affiliate Permal Group, and introduced an equity incentive program at Permal that would allow managers to invest and share in the growth of the organization.
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