BY: RAUTION JAISWAL WILLAMETTE UNIVERSITY (ATKINSON GRADUATE SCHOOL OF MANAGEMENT) Company Analysis Presentation   Novembe...
Legg Mason Inc . <ul><li>Overview : </li></ul><ul><li>Legg Mason is a global asset management company. </li></ul><ul><li>I...
Legg Mason Inc . <ul><li>Key Facts : </li></ul><ul><li>Legg Mason Inc. is among the top 5 US money managers. </li></ul><ul...
Quantitative Highlights
Financial Service Industry: Overview <ul><li>Effects of subprime mortgage industry is deep. </li></ul><ul><li>Technologica...
Industry Forecast <ul><li>Scale will be the key to generate edge </li></ul><ul><li>More crowded and complicated industry l...
Principal Manager profile <ul><li>One of the leading fixed    income manager. </li></ul><ul><li>  One of the America      ...
Legg Mason Inc. <ul><li>Highlights for 2008-2009: </li></ul><ul><li>AUM to grow about 10% in FY 08’ and 12% in 09’. </li><...
Legg Mason: Good Buy or Goodbye ? <ul><li>Benefits of synergy is still to be effective. </li></ul><ul><li>Equity managers ...
Running the numbers <ul><li>Cost of equity= 10.5% </li></ul><ul><li>Growth rate  = 15% </li></ul><ul><li>Operating profit ...
Legg Mason Inc. <ul><li>Risk and quality assessment: </li></ul><ul><li>Market risk </li></ul><ul><li>Relative investment p...
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Legg Mason

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Legg Mason

  1. 1. BY: RAUTION JAISWAL WILLAMETTE UNIVERSITY (ATKINSON GRADUATE SCHOOL OF MANAGEMENT) Company Analysis Presentation November 13, 2007 ______________
  2. 2. Legg Mason Inc . <ul><li>Overview : </li></ul><ul><li>Legg Mason is a global asset management company. </li></ul><ul><li>It serves wide variety of clients including institutional and individual investors. </li></ul><ul><li>It operates in three divisions: Managed investments, institutional and Wealth Management. </li></ul><ul><li>Legg Mason’s mission is to be, and be regarded as, one of the best Asset management firm in the world. </li></ul>
  3. 3. Legg Mason Inc . <ul><li>Key Facts : </li></ul><ul><li>Legg Mason Inc. is among the top 5 US money managers. </li></ul><ul><li>As of Sep. 30, 2007, asset under management is aggregated $ 1.012 trillion. </li></ul><ul><li>Legg Mason serves institutional and individual clients in over 190 countries. </li></ul><ul><li>As of Sep. 30, 2007, asset under management from non-US domiciled clients aggregated $336 billion (33%). </li></ul>
  4. 4. Quantitative Highlights
  5. 5. Financial Service Industry: Overview <ul><li>Effects of subprime mortgage industry is deep. </li></ul><ul><li>Technological advancement and financial product innovation will be key factors to drive growth. </li></ul><ul><li>Steady growth is expected in Asia and Europe. </li></ul><ul><li>In short term, economic conditions are not ideal so are the earning prospects. </li></ul>
  6. 6. Industry Forecast <ul><li>Scale will be the key to generate edge </li></ul><ul><li>More crowded and complicated industry landscape </li></ul><ul><li>A measured pace for merger and acquisition </li></ul><ul><li>Tough pricing environment </li></ul><ul><li>Tighter lending standards </li></ul><ul><li>High level of transparency </li></ul><ul><li>Greater appreciation for risk aversion </li></ul><ul><li>Product innovation </li></ul>
  7. 7. Principal Manager profile <ul><li>One of the leading fixed income manager. </li></ul><ul><li> One of the America leading equity manager. </li></ul><ul><li> A value oriented, small cap and micro-cap equity manager. </li></ul><ul><li> Permal group is one of the five largest fund-of- hedge-fund managers in the world. </li></ul><ul><li> Second largest equity manager. </li></ul><ul><li> Value investing in both equities and fixed income in US and internationally. </li></ul><ul><li> International and global manger focusing on quantitative analysis. </li></ul><ul><li> High net worth equity manager. </li></ul>
  8. 8. Legg Mason Inc. <ul><li>Highlights for 2008-2009: </li></ul><ul><li>AUM to grow about 10% in FY 08’ and 12% in 09’. </li></ul><ul><li>Operating profit to grow at 30% p.a. </li></ul><ul><li>Net distribution expense has reduced by 42% in FY 08’ and expected to reduced at same rate in 09’. </li></ul><ul><li>Under-performance by top equity managers has effected the earnings of 08’. </li></ul>
  9. 9. Legg Mason: Good Buy or Goodbye ? <ul><li>Benefits of synergy is still to be effective. </li></ul><ul><li>Equity managers will soon recover from their recent slump. </li></ul><ul><li>Long term trend favoring retirement planning company such as Legg Mason. </li></ul><ul><li>Legg Mason missed its earning for three consecutive quarters. </li></ul><ul><li>It has experienced substantial growth in international market. </li></ul>
  10. 10. Running the numbers <ul><li>Cost of equity= 10.5% </li></ul><ul><li>Growth rate = 15% </li></ul><ul><li>Operating profit margins = 30% </li></ul><ul><li>Current market price= $ 72.86 </li></ul><ul><li>Target price= $70-$98 </li></ul>
  11. 11. Legg Mason Inc. <ul><li>Risk and quality assessment: </li></ul><ul><li>Market risk </li></ul><ul><li>Relative investment performance </li></ul><ul><li>Regulatory issues </li></ul><ul><li>Integration challenges </li></ul><ul><li>Operational and support risk </li></ul><ul><li>Quality of management </li></ul>

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