Legg Mason's Joseph Sullivan On Investment Performance Turnaround (LM)

Joseph Sullivan,

president and CEO, discussed the company's renewed commitment to their model, and their plan to achieve better stability, as a guest on CNBC's Squawk Box Tuesday morning. So where do they stand now? "We do have about two-thirds of our assets in fixed income, but we are actually considerably more balanced than that in terms of revenue. So, about 55% of our revenues come from fixed income, with the remainder coming from equities and from alternatives. So, ah, we're more balanced than I think people realize," said Sullivan. In terms of how to put that money to work within the markets, Sullivan said that with "the volatility in the markets, and what we would consider to be exaggerated moves in the marketplace, there's been a bit of a decoupling I think between the fundamentals and where the market is." He went on to sat that "given some ill liquidity in the market, we feel think that that provides some opportunity for investors for the market actually." In terms of asset management, Sullivan called Legg Mason's model unique model, and compelling. "Our challenges over the last few years haven't been the model, it's been how we executed the model, and I think, I do think our model is very compelling. We, ah, are active managers. I think in a market like this, active management has an opportunity to really show what it can contribute. Ah, so we start with that," said Sullivan. "We're a scale player. We're over $650 billion. We provide what I think is the best of both worlds in terms of the best of an innovative model and the best of a multi-affiliate model." Beyond keeping their product set relevant, Sullivan talked up Legg's strengths, saying that the company was strong in fixed income, United States' equities, and alternatives "at least as it relates to the fund of hedge fund business," but they have a weak point in non-U.S. equity. They're looking to to acquire non-U.S. equities, said Sullivan. He went on to say that they have a need for "global equity exposure, international equity exposure, local equity exposure, emerging market equity exposure." "It is a gap for us," said Sullivan.