Legg Mason says Permal deal could spread to other units

(Reuters) - Legg Mason Inc sees the new revenue-sharing agreement that it established with its Permal affiliate as a "good framework for creating strong alignment with other affiliates," interim Chief Executive Officer Joseph Sullivan said on the company's quarterly earnings call on Friday.

Legg may also use that revenue-sharing model for future acquisitions, Sullivan said.

Tensions have emerged in a number of areas, with some affiliates saying they should get more help from the parent with selling and marketing their funds, given how much of their revenues they turn over to the firm, sources have told Reuters.

In December, Legg Mason said it was acquiring Fauchier Partners, a fund-of-hedge-funds firm with $6 billion in assets, from BNP Paribas Investment Partners, and merging it with Permal, a $17 billion funds-of-funds firm.

As part of that deal, Legg Mason said it had revised its employment deals and revenue-sharing agreements with Permal, which Sullivan said could become a model for additional changes aimed at its other affiliated investment units.

The company has been built over the years through a patchwork of deals, resulting in eight main independent asset management units, each with separate revenue-sharing agreements.

A pending merger between Legg Mason's equity-focused ClearBridge Investments and Legg Mason Capital Management units will soon reduce that figure to seven.

(Reporting By Jessica Toonkel; Editing by Lisa Von Ahn)

Source: http://news.yahoo.com/legg-mason-says-permal-deal-could-spread-other-133826926--sector.html

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