BY: RAUTION JAISWALWILLAMETTE UNIVERSITY

(ATKINSON GRADUATE SCHOOL OF

MANAGEMENT)

Company Analysis Presentation

November 13, 2007

______________

Legg Mason Inc.

Overview :Legg Mason is a global asset management

company.

It serves wide variety of clients including institutional and individual investors.

It operates in three divisions: Managed investments, institutional and Wealth Management.

Legg Mason’s mission is to be, and be regarded as, one of the best Asset management firm in the world.

Legg Mason Inc.

Key Facts :Legg Mason Inc. is among the top 5 US

money managers.As of Sep. 30, 2007, asset under management

is aggregated $ 1.012 trillion.Legg Mason serves institutional and

individual clients in over 190 countries.As of Sep. 30, 2007, asset under management

from non-US domiciled clients aggregated $336 billion (33%).

Quantitative Highlights

Financial Service Industry: Overview

Effects of subprime mortgage industry is deep.

Technological advancement and financial product innovation will be key factors to drive growth.

Steady growth is expected in Asia and Europe.

In short term, economic conditions are not ideal so are the earning prospects.

Industry Forecast

Scale will be the key to generate edgeMore crowded and complicated industry

landscapeA measured pace for merger and acquisitionTough pricing environment Tighter lending standardsHigh level of transparencyGreater appreciation for risk aversionProduct innovation

Principal Manager profile

One of the leading fixed income manager.

One of the America

leading equity manager. A value oriented,

small cap and micro-cap equity

manager.

Permal group is one of the five largest fund-of- hedge-fund managers in the world.

Second largest equity manager.

Value investing in both equities and fixed income in US and internationally.

International and global manger focusing on quantitative analysis.

High net worth equity manager.

Legg Mason Inc.

Highlights for 2008-2009:

AUM to grow about 10% in FY 08’ and 12% in 09’.

Operating profit to grow at 30% p.a.Net distribution expense has reduced by 42%

in FY 08’ and expected to reduced at same rate in 09’.

Under-performance by top equity managers has effected the earnings of 08’.

Legg Mason: Good Buy or Goodbye ?

Benefits of synergy is still to be effective.Equity managers will soon recover from their

recent slump.Long term trend favoring retirement planning

company such as Legg Mason.Legg Mason missed its earning for three

consecutive quarters.It has experienced substantial growth in

international market.

Running the numbers

Cost of equity= 10.5%

Growth rate = 15%

Operating profit margins = 30%

Current market price= $ 72.86

Target price= $70-$98

Legg Mason Inc.

Risk and quality assessment:Market riskRelative investment performanceRegulatory issuesIntegration challengesOperational and support riskQuality of management