This afternoon’s call will include remarks from the following speakers, Mr. Mark Fetting, Chairman and CEO, and Mr. Terrence Murphy, Legg Mason’s Interim CFO, who will discuss Legg Mason’s financial results. In addition, following the review of the company’s quarter, we will then open the call to Q&A.Now I would like to turn this call over to Mr. Mark Fetting. Mark? Mark Fetting Good afternoon. And thank you for your interest in Legg Mason. Today we will walk you through our results for our first fiscal quarter. We delivered a solid quarter in a volatile market, with more work to do to fully position Legg Mason for future growth. We have made considerable progress on our streamlining plans and we are on track to meet our targets. Joe Sullivan, our Chief Administrative Officer, has been working closely with our affiliates on transition plans and he is available to answer your questions later. During the quarter, the markets had another strong pullback. In July, the markets have continued to have significant swings, both positive and negative. While the volatility presents challenges, it also presents opportunity. Our investment managers see value in what they view as quality investment opportunities in a market in which investors have once again pulled back from risk. In fact, let me step back and speak to the markets from a client perspective, whether an institutional or individual investor. In the US, we believe the most likely scenario is that we are in a fragile recovery. In the words of our Small Cap Manager, Chuck Royce, we are looking at a ragged recovery. All of our managers agree a recovery stock market will be critical to restoring consumer confidence and consumption. Outside the US, we see particular importance in China where it appears that policymakers are navigating a soft landing. Even with structural and sovereign debt issues to solve, we believe that related investment opportunities exist in Europe. Emerging markets continue to be attractive in the long-term, although as they are more correlated to the US and China, the ripple effect of these big two countries, positive and negative, need to be watched. We do not see the most worrisome combination of a double dip in the US and a hard-landing in China. As a result, we believe investors can take advantage of this excessive fear factor and pursue attractive investments through our proven managers.
Let’s begin with our highlights for the quarter on slide two. As I said, we are streamlining our business model though the real financial impact will hit in later quarters. Our work is progressing, and we continue to balance between goals of getting this process completed expeditiously and ensuring we get the transition right for our clients and our affiliates. We had a highly successful launch of the new closed-end fund, the ClearBridge Energy MLP Fund, which is the largest closed-end fund raised since 2007. We believe that this is an indication that there is an appetite for innovative products.We executed a successful repurchase of our shares, reducing our shares outstanding by 6% to 154.5 million, with potentially more to repurchase as we complete an accelerated share repurchase arrangement. I am pleased to report that we had equity inflows in the quarter for the first time in four years. We reported net income of $48 million or $0.30 per diluted share and adjusted income of $96 million or $0.60 per diluted share. We go to slide three, which show graphically our streamline business model, which we first introduced to you last quarter. First and foremost is our affiliates. We are a multi-manager model with our affiliates delivering customized investment solutions. Our streamlining is designed to eliminate redundancies between corporate and the affiliates. Corporate will focus on distribution, capital allocation, and investments to drive growth, whether that is new investment town talent or seeding new products. With a strong balance sheet, we are well positioned to do that. Read the rest of this transcript for free on seekingalpha.com