Peltz Stays with Financials

Apparently Nelson Peltz likes banks and asset managers. Legg Mason, the fund management company, is one of the three big stakes he continues to hold and he’s bought other  financial services businesses as well.

Bank of America, JP Morgan Chase and State Street Corp. are in Mr. Peltz’s portfolio. While these investments are nowhere near as large as the position he took in Legg Mason, the combined effect is a substantial bet on the financial industry by his firm, Trian.

Trian’s top three holdings are Wendys Arbys Group, Legg Mason and Tiffany & Co.

Why the concentrated position in Legg Mason? At around $33, Legg Mason shares are only a fraction of what they were three years ago, when the price fluctuated around $100.  Since then, Legg Mason funds suffered heavy losses and heavy redemptions.

Mr. Peltz joined the board in October 2009 and the company has cut costs and become leaner.  Couple of weeks ago Legg Mason announced that assets grew by $3.1 billion from September.

The stock is up from by about 7% from last November.  Mr. Peltz presumably sees potential for further recovery, even as the market shows concern about financial stocks.


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