Legg Mason's Joe Sullivan is back in acquisition mode, recently buying the $10 billion Edinburgh-based Martin Currie.

However, this deal was an outright acquisition of the firm, like the other boutiques under Legg's umbrella. Halal Touryalai of Forbes writes that this arrangement is surprising, given Sullivan's outspoken aims to change this paradigm.

She cites comments from Sullivan in a March story she wrote on the executive, in which .

AMG leaves a slug of equity with its affiliates, so it reduces its compensation expense. If we had done that and all our affiliates kept 20% of the equity, then our margins would be in the high 30s or 40%,… We’re the first ones to acknowledge that AMG has the better model.

The multi-affiliate model isn’t deficient by its nature, but it is deficient if there is not an equity piece left with the managers,…

Touryalai wrote in that March article that Sullivan plans to restructure all of Legg's arrangements with its affiliates in the coming 18-months to give all of them profit-sharing deals.

Stealing a page from AMG CEO Sean Healey doesn't seem to be a bad idea. His ravenous quest for deals, all of which involving leaving skin with the target boutiques, has helped AMG's earnings. The firm recently garnered inclusion on the S & P 500.

Not that Sullivan is a slouch by any means, the Motley Fool recently doted on Sullivan for the way he has been revamping Legg over the past year. 

Edited by: Tommy Fernandez


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