NEW YORK (Reuters) – Nelson Peltzs’ Trian Fund Management LP may push Legg Mason Inc. to implement changes to spice up returns, an individual conversant in the matter stated on Tuesday, the second time in 10 years that Trian has focused the mutual fund firm.
FILE PHOTO: Nelson Peltz founding companion of Trian Fund Management LP. converse at the WSJD Live convention in Laguna Beach, California October 25, 2016. REUTERS/Mike Blake/File Photo
The two sides have mentioned slicing prices, the supply stated, and Legg Mason chairman, president and chief government 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 % within the final yr. Ranked as one of many nation’s 30 largest mutual fund companies, the corporate reported $758 billion in belongings beneath administration at the top of the fiscal yr, which led to March, up from $754.1 billion a yr earlier.
Like many different mutual fund companies, Legg Mason has been hit onerous by buyers’ shifting tastes for inexpensive index funds provided by bigger companies, together with Vanguard Group.
Representatives for Trian and Legg Mason might both not be reached for remark or declined to remark.
Trian’s discussions with Legg Mason have been first reported by the Wall Street 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 provided a seat on the board, which he held till late 2014.
During Peltz’ tenure as a director, Legg Mason appointed Sullivan as CEO, changing Mark Fetting who served for 4 years.
Earlier this yr Trian stopped in need of 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 General Electric Co and Procter & Gamble, the place the hedge fund has board seats.
Reporting by Svea Herbst-Bayliss; Editing by Sonya Hepinstall