Legg to take $523 million charge

Legg Mason Inc. will take new charges to provide support for its struggling money market funds, a move that will force the company to take a loss in the fourth quarter.
DEC 02, 2008
By  Bloomberg
Legg Mason Inc. will take new charges to provide support for its struggling money market funds, a move that will force the company to take a loss in the fourth quarter. The Baltimore-based money manager said it will take a $523 million charge in the fourth quarter to support money market funds that were exposed to structured investment vehicles. Net of adjustments to operating expenses and taxes, the charges amount to $316 million, or $2.24 per diluted share, Legg Mason said in a statement. The company said it renewed for one year a total return swap with a major banking institution in support of $355 million of SIV securities, and it obtained amendments to existing debt covenants. In addition, Legg Mason increased the maximum amount it has pledged under agreements to support four funds that purchased structured investment vehicles by $420 million. The company's exposure to SIVs was $2.8 billion as of Nov. 30, compared with $10 billion Oct. 31, 2007. "Today's actions give us financial and operating flexibility to handle potential further market deterioration," Mark R. Fetting, Legg Mason's chief executive, said in a statement. "We are actively pursuing a number of options to eliminate exposure to SIVs in the money market funds." Legg Mason had $842 billion in assets under management as of Sept. 30.

Latest News

Amid festering trade tensions, Grantham's GMO launches China-dodging ETF
Amid festering trade tensions, Grantham's GMO launches China-dodging ETF

Notwithstanding a recent tech-driven rebound in Chinese markets, five- and 10-year lookbacks suggest dropping the emerging-market giant is still the winning strategy.

Student debt has a chilling effect on employees' retirement planning, confirms research
Student debt has a chilling effect on employees' retirement planning, confirms research

A new study highlights how debt-saddled public and private workers are forced to focus on shorter-term investments and immediate financial concerns.

Decade of RIA M&A explosion shows no slowdown: Fidelity
Decade of RIA M&A explosion shows no slowdown: Fidelity

There's been an emergence of buyers, backed with PE dollars, making repeated acquisitions.

Spotlighting the Fastest-Growing Fee-Only RIAs in the USA
Spotlighting the Fastest-Growing Fee-Only RIAs in the USA

Discover which fee-only RIAs had standout performances in 2024

Advisor AI startup Zeplyn adds ex-LPL leader Kabir Sethi to board
Advisor AI startup Zeplyn adds ex-LPL leader Kabir Sethi to board

The two-decade veteran, whose career also includes a stint at Merill Lynch, will help shape strategy for the Google engineer-founded fintech.

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.