LM
#Good morning, <UNK>.
I think that's right, <UNK>.
And there's also ---+ they're also just looking to manage their fund line-up appropriately.
There is no concern that I have heard, and I wouldn't even imagine about style drift for Royce.
Look, as I mentioned, they are clearly under some pressure, and that's going to continue for some time.
But they have a clearly a solid reputation.
They perform very well over the long term.
Their process is consistent.
Their philosophy and their process is currently out of favor.
But there is really no, I think, concern or worry at all about them changing or chasing performance.
They have a well-earned reputation for selecting high-quality companies.
That's just a style that's currently out of favor.
But there is not going to be any drift there.
Well, it is.
It's very impactful.
So there is sort of generally regarded 15 top consultants.
Of those 15, we had 2 already that were a buy on Western.
We had one that was a hold.
Of the remaining, what, 12 from there, 5 over the course of the year, upgraded them.
And the remaining seven changed their outlook from sort of hold to positive.
So those are all important indicators of how the consultant community, and let's face it, the intuitional business is very reliant upon the consultant community.
Look, I think that reflects the fact that clearly they have improved risk management, clearly their performance warrants it.
And so I think it's a very good indicator for Western going forward.
I think we have all acknowledged they were a little bit in the penalty box for a while.
Clearly they have been emerged from that, and I think are gaining the support of more and more consultants.
That portends well for them long term in the institutional business.
Great.
Thank you, operator.
Appreciate it.
Look, this morning I would like to leave you all with what I consider to be the five key takeaways that we believe are critical to understanding Legg Mason and our long-term opportunities.
First, with nearly $17 billion in long-term flows and a 3% organic growth rate, Legg Mason is definitely back in growth mode.
And we look forward to building upon that momentum as we bring QS Investors and Martin Currie more fully online, while we continue to leverage our legacy affiliate growth engines.
Secondly, the diversification in our model is a key competitive advantage, as our varied affiliates balance one another to the benefit of clients and shareholders over different market cycles.
Third, Legg Mason's global distribution platform represents a significant strategic asset for both our affiliates and our shareholders.
This year was a record year for distribution in gross and net sales, and with the expectation of Royce, net positive flows across all regions and for all affiliates within LMGD.
Fourth, we will remain very focused on improving absolute earnings and margin over time by maintaining a rigorous cost discipline, accelerating our organic growth, working to improve our asset mix, and by implementing new management equity plans at our affiliates.
Each of these actions can be drivers of improved long-term profitability and potential margin expansion.
And, finally, we will continue to deploy the significant amount of cash that we generate between investments that expand our investment capabilities and distribution and returning capital to shareholders through dividends and share repurchases.
So thank you for your time today.
I'd like to congratulate my colleagues at Legg Mason and our affiliates for a good quarter and a strong year, and thank you our shareholders for your continued trust and confidence.
We look forward to rewarding your investment at Legg Mason again over the next year.
And with that, I wish you all a wonderful day and weekend.
