Legg Mason Investor Day

January 22, 2016

For internal use only. Not for distribution to the public. For internal use only. Not for distribution to the public. Agenda Welcome/Introduction………………………. Joe Sullivan FQ3 Earnings Review……………………….. Joe Sullivan/Pete Nachtwey Strategic Actions Building the Legg Mason of Tomorrow..Joe Sullivan Financial Impact of Strategic Actions…Pete Nachtwey Panel Discussions Western Fixed Income Discussion Positioned for Higher Rates…………. John Bellows Market Illiquidity ……………………….Mike Buchanan ETF Roundtable……………………………Tom Hoops/Terry Johnson Rick Genoni/Dan McCabe Affiliate Presentations RARE Infrastructure……………………… Carl McGann Clarion………………………………………. Steve Furnary/Dave Gilbert/Pat Tully EntrustPermal………………………………Gregg Hymowitz/Omar Kodmani Closing Comments.………………………...... Joe Sullivan F3Q16 Earnings Review Important Disclosures

Forward-Looking Statements This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not statements of facts or guarantees of future performance, and are subject to risks, uncertainties and other factors that may cause actual results to differ materially from those discussed in the statements. For a discussion of these risks and uncertainties, please see “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2015 and in the Company’s quarterly reports on Form 10-Q. Non-GAAP Financial Measures This presentation includes certain non-GAAP financial measures. These non-GAAP measures are in addition to, not a substitute for or superior to, measures of financial performance determined in accordance with GAAP. The company undertakes no obligation to update the information contained in this presentation to reflect subsequently occurring events or circumstances.

Page 1 Company Highlights

Fiscal Third Quarter

Net Loss $138.6M or $1.31 per diluted share •Includes non-cash impairment charge of $371M or $2.79 per diluted share Assets Under Management $671B Long-term net outflows $2.4B • Equity outflows $4.6B, partially offset by fixed income inflows $2.2B Global Distribution quarterly gross and net sales of $18.2B and $0.1B, respectively

Closed acquisition of RARE Infrastructure

Launched four new ETF products

Retired 0.6M shares for approximately $25M

Recent Developments

Announced agreement to acquire Clarion Partners, a leading diversified real estate firm

Announced agreement to acquire EnTrust Capital, a leading hedge fund solutions provider Announced agreement to acquire minority interest in Precidian Investments, a leading creator of innovative ETF intellectual property

Page 2 Assets Under Management ($ billions) Total AUM $671B Affiliate1 Dec 15 Sep 15 % Change Dec 14

28% $426.4 $438.3 (3%) $455.5 By Asset 55% Class

99.3 96.5 3% 108.1 17%

Fixed Income Equity Liquidity 68.8 65.6 5% 63.3

37% By Client 18.6 21.2 (13%) 32.1 Domicile 63%

17.6 18.2 (3%) 20.0 US Non-US

2 6.5 - - - 24% By Client 18.0 17.2 5% 13.6 Type 76%

11.4 10.7 6% 11.8 Institutional Retail

1 Primary affiliates ordered by contribution to fiscal year 2016 pre-tax earnings 2 Acquired in Oct 15 Page 3 Fiscal Third Quarter Affiliate Overview

• $2.8B total inflows − $3.1B fixed income • $2.0B outflows − ($0.3B) equity • $1.4B unfunded wins • $1.2B unfunded wins

• $0.1B total inflows • $0.5B outflows • $0.1B unfunded wins • $0.4B unfunded wins

• $0.3B inflows • Breakeven flows

• $0.8B long-term outflows • $2.8B outflows • $10.9B liquidity outflows • $3.5B unfunded wins

Page 4 Global Distribution Total Long-Term Assets1: $265B

Distribution Highlights ($ Billions) F3Q16 F2Q16 F3Q15 • Gross sales of $18.2B Gross Sales1: – Up 1% from F2Q16 US $10.9 $13.9 $17.9 Int’l 7.3 4.2 6.5 – Down 25% from F3Q15 Total $18.2 $18.1 $24.4 • Net sales of $0.1B vs $0.5B in F2Q16 Net Sales1: Ninth consecutive quarter of positive net sales • US $(3.1) $ 0.6 $ 6.5 • Quarterly global redemption rate at 27% Int’l 3.2 (0.1) 0.4 – US redemption rate 26% Total $ 0.1 $ 0.5 $ 6.9

Quarterly Gross and Net Sales Trends ($B) Top Funds Driving Gross Sales FYTD16

Western Asset Core Plus Bond Fund 30.0 Gross Sales Net Sales ClearBridge Aggressive Growth Fund 24.2 25.0 22.1 Western Asset Macro Opportunities Bond Fund 19.6 19.0 20.0 18.1 18.2 Western Asset Core Bond Fund 17.2 16.3 15.4 ClearBridge US Aggressive Growth Fund (Dublin) 15.0 Brandywine Global Sovereign Credit Fund

10.0 6.9 Brandywine Global Opportunities Bond Fund 5.0 5.3 ClearBridge Dividend Strategy Fund 5.0 2.1 1.7 1.5 1.1 0.5 0.1 Western Asset Managed Municipals Fund 0.0 ClearBridge Appreciation Fund Dec 13 Mar 14 Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15

1 For LMGD, Assets Under Advisement are included in long-term assets, gross sales and net sales. Net sales equals gross sales less redemptions. As of December 31, 2015 long-term assets include $9.3B of AUA. Quarterly AUA gross and net sales for F3Q16 are $1.0B and $0.4B, respectively, for F2Q16 are $1.0B and $0.4B, respectively, and for F3Q15 are $1.2B and $0.7B, respectively Page 5 Investment Performance

% of Strategy AUM beating Benchmark1 % of Long-Term U.S. Fund Assets beating Lipper Category Average2

3 5 3 5 80% 83% Year Year 63% Year 72% Year

100% 100% 83% 88% 80% 80 % 80 % 72% 60% 63% 60% 60 % 60 % 43% 40 % 40 %

20 % 20 %

0% 0% 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10 Year

1 See appendix for details regarding strategy performance 2 Includes open-end, closed-end, and variable annuity funds. Source: Lipper Inc. Past performance is no guarantee of future results. The information shown above does not reflect the performance of any specific fund. Individual fund performance will differ. Page 6 * As of December 31, 2015 Financial Highlights Third Quarter FY 2016 • Net Loss of $138.6M, or $1.31 per diluted share ‒ Includes the net expense impact of $204.7M or $1.901 per diluted share due to ‒ Non-cash impairment charge and real estate lease write-off ‒ Partially offset by contingent consideration adjustments, gain on Australian dollar hedge and various tax benefits • Adjusted income2 of $158.5M, or $1.45 per diluted share • Average AUM of $683.0B, down $4.2B – Long-term average AUM decreased $0.5B compared to prior quarter • Operating revenues $659.6M, down $13.5M or 2% from the prior quarter – Largely driven by lower yielding product mix, partially offset by RARE acquisition • Operating expenses $900.2M increased $360.1M from prior quarter largely driven by intangible asset impairment charge of $371M • Operating loss $240.6M • Operating income, as adjusted2 $108.4M, operating margin, as adjusted2 20.6% • Other non-operating expenses $1.6M, up $40.8M from the prior quarter – Lower losses on corporate investments not offset in compensation – Australian dollar hedge gain of $6.6M in current quarter, loss of $11.1M in prior quarter

1 Also includes $0.02 EPS impact of using basic versus diluted shares 2 Page 7 See Appendix for GAAP reconciliation Operating Results Third Quarter FY 2016

$ Change vs.

($ millions, except Dec 15 Sep 15 Dec 14 Sep 15 Dec 14 per share amounts) Qtr Qtr Qtr Qtr Qtr Operating Revenues $659.6 $673.1 $ 719.0 $ (13.5) $ (59.4) Operating Expenses 900.2 540.1 599.6 360.1 300.6 Operating Income/(Loss) (240.6) 133.0 119.4 (373.6) (360.0) Net Income/(Loss) (138.6) 64.3 77.0 (202.9) (215.6) Diluted EPS (1.31) 0.58 0.67 (1.89) (1.98) Adjusted Income1 158.5 99.1 113.1 59.4 45.4 Adjusted Income per diluted share1 1.45 0.89 0.98 0.56 0.47

Operating Margin, as adjusted1 20.6% 24.0% 21.4%

Effective Tax Rate GAAP2 42.8% 30.5% 32.2%

1 See Appendix for GAAP reconciliation 2 Includes the impact of Consolidated Investment Vehicles (CIVs) of (0.2%), 0.5%, and (0.8%) in Dec 15, Sep 15, and Dec 14, respectively Page 8 Assets Under Management by Asset Class

($ billions) % Mix % Mix % Mix 800 Dec 14 Sep 15 Dec 15 $709 $703 $699 $672 $671

600 $199 28% $200 $197 $178 26% $186 28%

400 $367 52% $376 $372 $368 55% $370 55% 200 $143 20%$127 $130 $126 19%$115 17% 0 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Liquidity Fixed Income Equity

• AUM decreased $0.6B from prior quarter − Market appreciation of $6.4B and negative FX impact of $0.5B − Acquisition of RARE Infrastructure $6.8B − Liquidity outflows of $10.9B − Long-term outflows of $2.4B

Page 9 Net Flows – Quarterly

Fixed Income Total Long-Term 10 Equity 10 9.9 8 8 8.8 7.6 10 6 6 6.2 8 4 4 6 3.1 2 2.6 3.0 4 2 2.2 1.3 0 2 0.1 0 ($ Billions) ($ Billions) 0

-2 ($ Billions) -2 -2 (1.1) (1.4) (1.3) -4 -4 -4 (4.6) (2.4) -6 -6 -6 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15

Liquidity Total Flows 15 15 10 10 5 2.3 5 3.6 0.1 0 0 -5 (3.0) -5 (1.8) ($ Billions) -10 ($ Billions)-10 (9.1) -15 (10.6) (10.9) -15 (13.3) -20 (15.3) -20 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15

• Fixed income inflows driven by Global Opportunistic $2.8B and Corporate Bond $1.3B, partially offset by outflows of Long Duration $0.8B and Structured Securities $0.6B • Equity outflows driven by Small Cap $3.1B, Large Cap $0.7B and Equity Income $0.5B

Page 10 Operating Revenue Yield1 / Average AUM $800 42.5

$600 28% 27% 28% 28% 40.0

$400 39.6 bps 38.5 bps 38.4 bps

37.8 bps 37.5

Average AUM AUM ($B) Average $200 53% 52% 54% 54% Operating Revenue Yield (bps) Yield Revenue Operating 20% 20% 18% 18% $- 35.0 Dec 13 Mar 14 Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15

Liquidity Fixed Income Equity Operating Revenue Yield

• Total average AUM down $4.2B – Equity AUM down $1.4B and fixed income AUM up $0.9B – Liquidity AUM down $3.6B • Operating revenue yield down 0.6 bps primarily due to lower yield driven by a change in product mix

1 Operating revenues = total operating revenues less performance fees Page 11 Performance fees for Dec 14, Sep 15, and Dec 15 are $29.1M, $7.9M, and $9.2M, respectively Operating Expenses

$1,000 $371 ($14) $900 $900

$800

$700 $ in Millions $600 $540 ($6) ($1) $10 $500

$400 Sep Qtr D&S Comm & Occupancy Intangible Other Dec Qtr Expense Tech Impairment

• Total Operating expenses, excluding non-cash impairment of intangible assets decreased $11M compared to the prior quarter – Occupancy expense increased due to real estate charge of $9.4M – Decrease in other expenses primarily due to – $26M credit related to contingent consideration adjustments – Partially offset by increased advertising, conference and ETF expenses, as well as deal-related costs Page 12 Compensation and Benefits

($ millions) % of % of $ Dec Qtr Net Rev. 1 Sep Qtr Net Rev. 1 Change Salary and incentives$ 227.7 43%$ 235.0 44%$ (7.3) Benefits and payroll taxes 51.7 10% 52.7 10% (1.0) Subtotal Compensation and benefits 279.4 53% 287.7 54% (8.3) Transition costs and severance 0.6 0% 0.2 0% 0.4 MTM deferred comp. and seed investments 2.8 1% (5.5) (1%) 8.3 Total Compensation and benefits$ 282.8 54%$ 282.4 53%$ 0.4

• Salary and incentives declined largely due to lower affiliate incentives related to decreased revenues

Page 13 1 Net revenue is equal to operating revenues, as adjusted. See appendix for GAAP reconciliation Operating Margin, as Adjusted

24.1% $800 23.3% 23.8% 23.8% 24.0% 25% 22.9% 22.6% 21.4% 20.6%

$700 20%

$600 15% Op Margin, asAdj Average AUM AUM ($B) Average $500 10%

Dec 13 Mar 14 Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 $400 5% Avg AUM Operating Margin, as adjusted

• Impact of real estate charges and deal-related costs on operating margin, as adjusted was 2.0%

Page 14 Note: See Appendix for GAAP reconciliation Impact of Markets on Non-Operating Income – Other

($ millions) Dec Qtr Sep Qtr Change Other Income (Expense)$ 6.5 $ (28.1) $ 34.6 Less: RARE Australian dollar hedge gain/(loss) 6.6 (11.1) 17.7 Other Inc (Exp) Ex RARE hedge gain/(loss) (0.1) (17.0) 16.9 1 Other LM Investment activity 1.2 1.6 (0.4) MTM on deferred comp. & seed investments (1.3) (18.6) 17.3 MTM offset in comp. & benefits 2.8 (5.5) 8.3 2 MTM on deferred comp. & seed Investments, not offset$ (4.1) $ (13.1) $ 9.0

EPS Impact$ (0.02) $ (0.08) $ 0.05

MV of Def. Comp & Seed Inv . ($M)

MTM Change2 $138 $146 Alternative 3.0 Equity 0.8

$123 $80 Fixed Income 0.9 Deferred Comp 4.3 9.0 Alternative Equity Fixed Income Def Comp

1 Other LM Investment activity includes dividend and partnership income Page 15 2 Net of market hedges and compensation and benefit offsets Third Quarter Earnings Per Share Rollforward

$1.00

$0.58 $0.02 ($0.06) $0.05 ($1.90)

$0.50 EPS ($1.31)

($1.31)$(0.50) 1 Sep Qtr EPS Q2 Items Lower Op Inc Change in MTM Q3 Items Dec Qtr EPS

• Lower operating income due to decline in operating revenue yield driven by a change in product mix, increased advertising, conference and ETF expenses, as well as deal-related costs • Q3 items include intangible assets impairment charge, contingent consideration adjustments, real estate lease write-off, Australian dollar hedge gain related to RARE purchase price, various tax adjustments, and the impact of using basic rather than fully diluted shares

Page 16 1 Australian dollar hedge loss $11.1M, RARE acquisition costs $0.7M and discrete tax benefit $5.0M Industry Leader in the Rate of Returning Capital Since March 2010 returned $2.5 Billion

Shares Outstanding (M) Annualized Quarterly Dividend Declared (Per Share)

175 163 34% reduction since $0.90 150 March 2010 $0.80 150 140 $0.80 125 $0.70 $0.64 $0.60 125 117 $0.52 111 $0.50 108 $0.44 $0.40 $0.32 100 $0.30 $0.24 $0.20 $0.12 75 $0.10 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14 Mar 15 Dec 15 $0.00 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14 Mar 15 Dec 15

Quarterly Cash Position ($M) Seed Investments of $364M 1 $800

665 670 619 $600 563 530

$400 38% 40%

$200 22%

$0 Equity Fixed Income Alternative Dec 14 Mar 15 Jun 15 Sep 15 Dec 15

1 Market value as of December 31, 2015 Page 17 Legg Mason Investor Day

January 22, 2016

For internal use only. Not for distribution to the public. For internal use only. Not for distribution to the public. Strategic Actions/ Building the Legg Mason of Tomorrow Inflection Point in the Asset Management Industry

Key drivers of evolving Product investor preferences Innovation:

Demographics Interconnected Next Generation Markets Alternatives Implications ETFs on the Outcome Oriented Solutions Industry: Investors Demanding More Distribution: Choice Retail Quasi-Retail Institutional Regulation Technology

Page 2 Changing Investor Demand Driving Investment Strategy Migration

Global Asset Management Industry Net New Flows $5.0 by Strategy Type, 2016E-2020E (US$ Trillions)

$4.0 Next-Gen Fixed Income $3T projected net new 0.9 $3.0 Unconstrained Equity, 0.3 flows across all segments $2.0 Multi-Asset Strategies, 1.3

$1.0 Real Assets & Private Smart Beta, 0.3 Capital, 1.1 Cap-Weighted Traditional Fixed Passive, 0.8 $0.0 Income, 0.6 Trading Strategies, 0.3

($1.0) Traditional Equity, -2.4

($2.0)

($3.0) Classic Active Next Generation Active Traditional Passive

Note: Excludes China Page 3 Source: Casey Quirk Report: The Roar of the Crowd: How Individual Investors Transform Competition in Asset Management. November 2015 Changing Demand for US Investment Vehicles

2015E- 2018E 2015E US Investment US Investment Vehicle Vehicles Marketshare Projected 3 Yr Annualized Growth

• Since 2000, mutual fund asset market-share1 has declined as investors moved into ETFs where the share is approximately 11% vs. less than 1% in 2000. This trend is expected to accelerate in the next five years

1 Reflects short-term and long-term mutual funds combined Page 4 Source: Cerulli Associates Industry Marketshare by Distribution Channel

2014 Marketshare 2008-2019E Marketshare By Channel Gain/Loss

• Marketshare in the wirehouse channel fell from 31% in 2008 to 27% in 2014 • Retail direct has benefited since 2008 as its marketshare has increased from 18% to 22% • RIA channel also has increased marketshare from 7% in 2008 to 9% in 2014

Source: Cerulli Associates Page 5 Note: Retail Direct includes Direct, Robo Advisors, & Online Legg Mason – Vision and Strategy

Page 6 Transitioning to Building the Legg Mason of Tomorrow

• Began by building a better Legg Mason positioned to win today • Transitioning to building the Legg Mason of tomorrow

Priorities identified in 2013 Steps Taken

Multi-Asset • Add talent/capabilities Solutions • Few stand-alone platforms, focus on under levered subs

International • Prioritize actionable, high performing platforms Equity

• Strategies include broad hedge fund universe (e.g. distressed Liquid debt, commodities/CTA) Alternatives • Prioritize quality, sub-scale players

Fund of • Opportunistic M&A Hedge Funds

• Strategies include private equity, real estate, infrastructure, Illiquid natural resources/energy Alternatives • Few quality options that offer both institutional and retail products

Specialized • Focus on active ETFs and niche oriented firms ETFs • Few available scale players

Page 7 Overview of Announced Transactions

Total Assets $12B $40B ActiveShares awaiting SEC approval

Location New York, NY New York, NY Bedminster, NJ

• Innovative ETF product and market • Leading Hedge Funds Solutions • Leading Real Estate investment structure solutions provider manager • Relatively easy integration into Description • Investment Capabilities across Core • Broad Real Estate investment existing broker dealer systems and Funds, Strategic Partnerships and capabilities across Core, Core-plus capability to mask daily holdings Special Opportunities and Value-Add / Opportunistic themes from threat of reverse engineering

Themes Fund of Hedge Funds Illiquid Alternatives (Real Estate) Specialized ETFs Addressed

• Leading Alternative Asset Management brand • Well known historical brand • Address ETF product gap • Platform to grow multi-alternative • Fills gap in Real Estate capabilities • Proprietary technology and expertise capabilities • Demonstrated ability to grow: AUM up in creation of innovative financial Strategic • Consistent AUM growth through 50% since 2010 products Rationale market cycles; approx. 18% CAGR • High quality earnings attributes • Specialization in ETF and mutual since 2007 • New product potential in LM Global fund development, and associated • Combined firm will be #3 in the Distribution trading and pricing techniques industry

Page 8 Financial Impact of Strategic Actions Management Equity Plan1 - Increased Revenue Share to LM Shareholders • A component of Royce’s existing share of revenues equitized into a minority interest, through the issuance of equity units, with an option for additional equitization over the next three years – The initial awards to key employees will total 7%-9% of revenues with 3%-5% held for issuance in future years • As part of the transaction, Legg Mason will receive a permanent increase of two net revenue percentage points, phased in over 12 months • Financial Impact – Increases LM revenue share and operating margin – Approximate non-cash charge of $35 – $50 million on initial issuance – Projected non-cash charges on additional issuances of approximately $15 – $30 million – No cash charge, now or in the future, for issuance of additional equity • Strategically we believe this form of management equity is more appropriate for where Royce’s business is today versus our “traditional” MEP

1. The proposed Management Equity Plan terms have been agreed in principle. Final documentation must be signed to Page 10 implement the plan. The final implementation is expected to occur in F4Q16 Key Benefits for Legg Mason Shareholders

• Promotes long term alignment of interests through equity participation – Establishes ownership culture – Alignment of incentives – Retention, succession, transition, and recruiting tool

• Permanent increase in revenue share – Increases Legg Mason revenue share and operating margin – Revenue share increase fully implemented within 12 months of initial award – No cash charge, and no future cash obligation

• Secures extended contractual commitment from key leaders and employees – Drives stability and depth of management and investment teams

Page 11 - Transaction Overview

• EnTrust will be combined with Permal creating a leading alternative asset management player and a global leader in the hedge funds solutions business • Combined firm will have pro forma AUM of approximately $26 billion1 and total assets of $29B2, and will be led by EnTrust’s CEO Gregg Hymowitz – Key leadership from Permal to be retained • Total consideration for EnTrust consists of an upfront payment of $400 million in cash and 35% equity in combined firm – Significant retained equity for improved alignment – Majority of the after tax proceeds from the sale will be invested in the firm’s products – Post-closing, LM will own 65% of combined firm • Combined firm will operate as a non-revenue share Affiliate • LM expects to realize annual cost saves from the combined firm of approximately $35- $40M, associated restructuring charges of approximately $100M • Transaction is expected to be modestly accretive year one, after giving effect to estimated cost savings achieved that year and excluding restructuring and transition charges • Standard employment agreements for key leaders

1 Excludes Permal Capital Management AUM of approximately $2 billion, which will be separated from EnTrustPermal Page 12 2 Total assets include AUM, assets under advisory and unfunded contractually committed assets - Transaction Overview

• Clarion to become LM’s real estate investing platform • LM will purchase an 83% ownership stake for cash consideration of $585M1 • Clarion’s management team will retain 17% equity – Significant retained equity for improved alignment • LM will pay for its portion of certain co-investments on a dollar for dollar basis, estimated at $16M as of December 31, 2015 • LM restricted stock grant of approximately $27M, subject to prospective EBITDA hurdles • LM will provide co-investment capital of $100M in the future to be invested in Clarion products • Management Equity Plan of 15% of future value creation • Clarion will operate as a non-revenue share Affiliate • Transaction is expected to be modestly accretive in year one, excluding one-time deal-related charges of $10-$15M • Standard employment agreements with key business leaders

1 Clarion employees may elect to rollover up to an additional 3% ownership stake in the business. If this occurs, the Page 13 purchase price will decrease proportionately - Transaction Overview

• LM made a strategic investment in Precidian, acquiring a new class of preferred equity entitling LM to the rights of a holder of 19.9% of common equity

• As part of this agreement, Legg Mason has the option, for additional consideration, to convert the preferred equity into common equity representing a majority position in Precidian

– Management to retain significant equity for improved alignment

• Precidian will continue to operate as a stand-alone business, run by its existing management team

– Will operate as a non-revenue share Affiliate post equity conversion

• Partnering with Precidian will allow LM to leverage a team focused on continuous innovation across a range of products, processes and instruments

• Standard employment agreements for key leaders

Page 14 F4Q16 & FY17 Expected Charges Related to Deal Activity

Charges Related to: F4Q16 FY17

Royce MEP Non-cash charge $35M to $50M Clarion Investments Non-cash MEP Charge $10M to $15M EnTrust/Permal Combination Severance and related charges $30M to $35M $20M to $25M Non-cash real estate related $5M to $10M $30M to $35M LM Corporate Bankers’ fees and $5M to $10M $5M to $10M accounting/legal costs

Page 15 M&A Financing Options

Total Current Potential Interst/Div Rates Current Debt Financing Options Year 1 US Senior Debt 5 year 2.70% $250 US Senior Debt 10 year 3.95% $250 US Senior Debt 30 year 5.625% $550 AUD Debt 7 year 3.60% $200 $7 US Senior Debt 10 year 4.31% $500 $22 Preferred/Hybrid 6.50% $300 $20

Bank Term Loan/Revolver 1 Yr1 2.30% $40 $400 $9 Yr2 2.80% Total Interest / Pref Div Expense $58 2 Total Debt/Preferred $1,090 $1,400 $1,350

If debt markets are closed, we have the financial flexibility to finance all announced activities with our Bank Term Loan and cash

Page 16 1 Bank Term loan assumes floating with 2 hikes per year 2 Year 1 Total Debt/Preferred includes an expected $50M of delevering Significant Tax Benefit Current Projected Tax Benefit Tax Benefit

$5 $5

$4 $4 $3.7B

$2.8B $3 $3

$2.5 $ in Billions in $ $2 $1.6 Billions in $ $2 $1.5B $1.1B

$1 $1 $1.0 $0.6 $1.2 $1.2 $0.5 $0.5 $0 $0 Tax Shield Tax Benefit Tax Shield Tax Benefit

NOL/FTC Purchased Goodwill and intangibles NOL/FTC Purchased Goodwill and intangibles

• Projected to begin reducing the tax shield in • Projected to begin reducing the tax shield in FY19, start paying US tax in FY21 and fully FY17, start paying US tax in FY19 and fully utilize the tax shield in FY24 utilize the tax shield in FY31

Page 17 Margin Expansion

While our business model has some inherent structural limits, there are multiple ways we can expand our margin over time

MMF Fee Waivers

Tiered Revenue With a return to a Share “normal” interest rate environment, Parent Operating Increasing margin money market fee Leverage to the parent is a waivers should component of some decline AUM Organic Parent costs are of our Management Growth largely fixed and Equity Plans, which highly scalable as can lead to AUM Market AUM growth due to AUM increases. additional margin net inflows, from Growth Our largest parent as revenue grows most of our variable cost is AUM growth from affiliates, has high LMGD market and incremental commissions, investment margins. There is which fluctuate with performance has virtually no sales volume. no incremental incremental parent Current parent cost cost to affiliate- sourced inflows, Margin and LMGD-sourced inflows have “front loaded” commission costs and low costs over the remaining life of the AUM Page 18 Higher Interest Rate & Liquidity Impact of Rising Rates

Impact of rising rates on fixed-income business .AUM impact likely limited .Historical Evidence: 1940-1970 bond bear market Western Asset specific considerations .Performance relative to benchmark / competition .Credit spreads and diversified portfolios .Historical Evidence: 2004 Rate Hiking Cycle Market outlook .Low Inflation .Cautious Central Banks

Page 20 Impact of Rising Rates (1 of 2)

Elementary school bond math: .Change in AUM = (Duration) X (Change in Interest Rates) X (Starting AUM) –Duration of non-MMF assets = 4 years => 100 bps rate rise decreases AUM by 4% .BUT, this gives you the wrong answer!

Graduate school bond math: .Coupon .Rolldown .Credit Spreads .Yield Curve Shape .All likely to mitigate impact to a significant degree

Page 21 Impact of Rising Rates (2 of 2)

Even during the largest bear market in history, Intermediate or 5 year rates generated positive returns

Page 22 Source: Morningstar/Ibbotson SBBI Western Asset Specific Considerations (1 of 2) Relative Performance is Most Important Determinant of Flows

Quarterly % of Composites Outperforming Bench Annual % of Composites Outperforming Bench 120

100 100 95 95 90 89

80 74 70

60 60

Percent 48

40 30

0 Mar 04 Jun 04 Jun 04 Dec 04 Mar 05 Jun 04 Jun 04 Dec 05

Page 23 Source: Western Asset Western Asset Specific Considerations (2 of 2) Western Asset’s business Grew in 2004 and 2005, Even as the Fed Raised Rates 12 Times

WA Overview – 2004 and 2005* (calendar year)

782 795 756 700 709 639 655 598

478 454 468 431 435 395 409 374

249 230 241 196 211 160 163 176

AUM ($B) # Clients # Accounts

Source: Western Asset Figures exclude third party LLC clients (consistent with current methodology) Page 24 *Q405 excludes the acquisition of substantially all of Citigroup Asset Management, which occurred in 01 Dec 05 Market Outlook (1 of 2)

Global Inflation Remains Under Pressure

Percent Developed Markets 6

-2 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Source: IMF World Economic Outlook Nov 15

Page 25 Market Outlook (2 of 2)

“Gradual” Rate Hike Cycle in the US

Rate Hiking Cycles 4.5

4.0 June 2004 3.5

Feb. 1994 3.0

2.5 April 1987

2.0 Dec 2015?

1.5 Percent Cumulative Change Percent Cumulative

1.0

0.5

0.0 0 102030405060708090100110 Weeks Since First Hike Source: Federal Reserve, Bloomberg. As of 18 Sep 15

Page 26 Fixed-Income Environment

Liquidity conditions .Regulatory .Investor risk aversion Value Opportunities .Credit cycle misconceptions .High-yield

Page 27 The Changing Landscape for Fixed-Income Liquidity The financial crisis of 2008 resulted in significant regulatory and behavioral changes that have had a major impact on banks' ability to act as market maker Regulation . Dodd-Frank Wall Street Reform and Consumer Protection Act – Goals:  More and better capital  Enhance liquidity for the banking system (cash and liquid investment securities)  Limit risk-taking (Volcker Rule)  Prohibits banks (dealers) from engaging in proprietary trading  Limits investments in hedge funds and private equity . Basel III – Goal:  Harmonize global capital standards for banks  Strengthens balance sheet by reducing leverage and increasing core equity capital  Raises capital charges for trading book (inventory) Changing Behaviors . Heightened risk awareness among dealers and investment managers (2008 experience now part of your data set) . Less appetite for taking risk

Page 28 Higher Capital Charges for Dealer Inventory Regulatory changes have made it significantly more costly for dealers to keep inventory

3x Cost for Investment-Grade 5x Cost for High-Yield Risk-Weighted Asset Charges Risk-Weighted Asset Charges 7.0x 7.0x

6.0x 6.0x 5.0x 5.0x 5.0x

4.0x 4.0x 3.4x

3.0x 3.0x

2.0x 2.0x 1.0x 1.0x 1.0x 1.0x 1.0x 1.0x

0.0x 0.0x Basel I Basel II Basel III Basel I Basel II Basel III

3-5x increase in charges for corporate bonds

Note: Capital Impact from Basel 1 to Basel 3 is based on single bonds and does not take into account portfolio diversification effects Page 29 Source: U.S. Department of the Treasury. “Assessing fixed income market liquidity: Presentation to TBAC, July 2013” Inventory Levels Are Dramatically Lower and Likely to See Further Reduction

We have already seen a dramatic reduction in dealer inventories and we expect this decline to continue, putting further strain on liquidity.

Changes in Dealer Balance Sheet Further Potential Area 2010–2014 Reduction

Rates & Repo ~ -30% -15% to -25%

FX, EM, & Commodities ~ -25% -5% to 0%

Credit & Securitized ~ -30% -5% to -15%

Equities ~ 0% -5% to 0%

Total ~ -20% -10% to -15%

Source: Morgan Stanley, Oliver Wyman proprietary data and analysis

Copyright 2015 Morgan Stanley. Please note that materials that are referenced comprise excerpts from research reports and should not be relied on as investment advice. This material is only as current as the publication date of the underlying Morgan Stanley research. For important disclosures, stock price charts and equity rating histories regarding companies that are the subject of the underlying Morgan Stanley research, see www.morganstanley.com/researchdisclosures. Additionally, Morgan Stanley has provided its materials here as a courtesy. Therefore, Morgan Stanley and Western Asset Page 30 Management Company do not undertake to advise you of changes in the opinions or information set forth in these materials. Dealer Inventory…. a Small but Vital Source of Risk Capital As dealer risk capital available for market making continues to decline, liquidity takers, most importantly retail mutual funds, continue to increase

US Corporate Credit Asset Ownership (trillions, USD)

~$12 Trillion Government & Other¹

~$9 Trillion Households

Insurance

Pension

Dealer <1% Inventories

Mutual Funds 5% 21% 11%

2005 2015

Copyright 2015 Morgan Stanley. Please note that materials that are referenced comprise excerpts from research reports and should not be relied on as investment advice. This material is only as current as the publication date of the underlying Morgan Stanley research. For important disclosures, stock price charts and equity rating histories regarding companies that are the subject of the underlying Morgan Stanley research, see www.morganstanley.com/researchdisclosures. Additionally, Morgan Stanley has provided its materials here as a courtesy. Therefore, Morgan Stanley and Western Asset Page 31 Management Company do not undertake to advise you of changes in the opinions or information set forth in these materials. Retail Fund Flows during Times of Stress

35 years of market shocks have shown us that retail flows are quite resilient, and provide an indication of the liquidity events we will have to manage

Redemption Levels in Crisis Periods

Crisis Time period, asset class Net flows during crisis period Black Monday -3% Q4 1987, Equity and FICC

Fed rate hikes -5% Q4 1994, FICC

Mexico -1% Q1 1995, EM - LATAM

Emerging Markets 0% Q3 1997, EM - Asia

Internet bubble burst -2% Q2 2002, Equity Financial crisis Q4 2008, Equity and FICC -4% Money market fund run Sept 2008, MMFs -10% Industry average net outflows Straight average of outflows for bottom quartile funds ¹Excludes Dec 20th - Dec 31st which saw -2% outflows ²Run on MMFs only covers 4 weeks Source: ICI, Morningstar, Morgan Stanley, Oliver Wyman analysis

Copyright 2015 Morgan Stanley. Please note that materials that are referenced comprise excerpts from research reports and should not be relied on as investment advice. This material is only as current as the publication date of the underlying Morgan Stanley research. For important disclosures, stock price charts and equity rating histories regarding companies that are the subject of the underlying Morgan Stanley research, see www.morganstanley.com/researchdisclosures. Page 32 Additionally, Morgan Stanley has provided its materials here as a courtesy. Therefore, Morgan Stanley and Western Asset Management Company do not undertake to advise you of changes in the opinions or information set forth in these materials. Managing Liquidity

Carefully managing liquidity at different levels allows us to prepare to meet a stressed market environment, while avoiding cash drag

Portfolio Liquidity Levels

Level 1 Level 2 Level 3 Level 4 Level 5

Worst 20-Day Redemption

Worst 5-Day Redemption

Worst 1-Day Redemption

Barclays Global High-Yield Index

Global High-Yield Portfolio

0 102030405060708090100 Market Value (%)

The worst 5-day outflow for this portfolio during the 2008 credit crisis was 9%. It also had an 18% 5-day outflow in mid-2014. While the 2014 outflow was due to unique circumstances that are unlikely to be repeated, we use it as our worst case stress test. Page 33 Source: Western Asset, Barclays. As of 30 Jun 15 Value Opportunities in Fixed-Income

Page 34 Gross Leverage Is Rising Sharply, Though Driven by Better Quality Credits That Are Adding Leverage

There Is Less High-Grade Debt Levered below 2x Now, Gross Leverage (Debt/EBITDA) and More above 2x 2.8x 6.0x 45 Overall (left) 41 Weakest 33% (right) 40 4Q12 2.6x 5.5x 35 3Q15 35 31 2.4x 5.0x 30 26 2.2x 25 4.5x 20 2.0x 17 Percent of Percent Debt 13 4.0x 15 12 1.8x 10 3.5x 6 1.6x 4 4 5 3 3 2 1 1.4x 3.0x 0 1Q00 1Q02 1Q04 1Q06 1Q08 1Q10 1Q12 1Q14 0-1x 1-2x 2-3x 3-4x 4-5x 5-6x 6x+

Source: Capital IQ, Bloomberg, J.P. Morgan. As of 30 Sep 15. Based on the Non-Financial companies in J.P. Morgan's HG Bond index. Page 35 Corporate Cash Going to Shareholders Has Doubled in Five Years

Buybacks plus Dividends from HG Issuers Have Stabilized Share Buybacks Dividends 700

600

500

400

300 USD (billions) USD

200

100

0 1Q10 1Q11 1Q12 1Q13 1Q14 1Q15 Source: Capital IQ, Bloomberg, J.P. Morgan. As of 30 Sep 15. Based on the Non-Financial companies in J.P. Morgan's HG Bond index.

Page 36 US High-Yield Valuations Imply a Record Level of Defaults for Asset Class, Energy Sector and CCC Rating Category Barclays U.S. High Yield Index OAS: 676 bps Modern Era Peak Recovery Rate: 30% Year 1 Year 2 Year 3 Year 4 Year 5 1999-2003 Annual Default Rate 9.2% 9.2% 9.2% 9.2% 9.2% Cumulative Default Rate 9.2% 17.6% 25.2% 32.0% 38.3% 37.2% Source: Barclays, Bloomberg. As of 06 Jan 16

Barclays U.S. High Yield Energy Index OAS: 1,306 bps Recovery Rate: 30% Year 1 Year 2 Year 3 Year 4 Year 5 1983-1987 Annual Default Rate 17.0% 17.0% 17.0% 17.0% 17.0% Cumulative Default Rate 17.0% 31.1% 42.9% 52.6% 60.7% 22.1% Source: Barclays, Bloomberg. As of 06 Jan 16

Barclays U.S. High Yield CCC Index OAS: 1,386 bps Recovery Rate: 30% Year 1 Year 2 Year 3 Year 4 Year 5 Annual Default Rate 18.0% 18.0% 18.0% 18.0% 18.0% Cumulative Default Rate 18.0% 32.7% 44.8% 54.7% 62.8% Source: Barclays, Bloomberg. As of 06 Jan 16 Default Rates, High-Yield Corporates 50 5-Year Cumulative Default Rate Based on 30% Recovery Implied by Market Pricing 31 Dec 15 (41.09%¹) 40

Percent 20

10 5-Year Cumulative Rate of Historical Defaults, Speculative-Grade Corporates 0 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Source: Moody's, Barclays, Bloomberg. As of 31 Dec 15 ¹Calculation assumes 25 bps liquidity premium Page 37 WISER Risk Report, Core Full Portfolio Benchmark: Barclays U.S. Aggregate Index

*Security Partition buckets exclude Currency and Curve risk and thus the TE Contribution % values may not sum to 100%. Any Currency and/or Curve Contribution to TE can be seen in the "Contribution to Tracking Error" section at the top of page. Note: This risk dashboard above is for illustrative purposes only and reflects Western Asset's best efforts to identify and measure the major sources of risk in the sample portfolio. Results depicted are dependent on an underlying statistical model and/or varying market Page 38 conditions and are therefore subject to change without notice. There is no guarantee that ex-ante risk measures will be in line with their ex-post realizations. The WISER model has not been fully validated at this time. ETF Panel The U.S. ETF Market is Expected to Reach $5T in 2020, But New Drivers of Growth Are Emerging

While still dominated by traditional market cap indexes, the highest ETF growth rates are in newer categories, and include managers outside of the "passive oligopoly."

The ETF market by investment type

Market Active US ETF Smart Cap Market Beta (“Beta”)

Assets: $2.1T $1.7T $458B $23B 3 Yr CAGR 17% 14% 30% 30% 1 Yr Change 16% 5% 12% 40% # of ETFs 1,836 1,174 519 139

Page 40 Source: Morningstar Direct, Bloomberg. Adapted from ETFGI. Size of bubble represents amount of assets invested. Advisor Adoption of ETFs Continues to Grow

Adviser Expected Usage 3Yrs Key Observations About Advisor’s Use of ETFs in the U.S.

Percent of advisors who 86% use ETFs

Percent of advisors who 59% use ETFs as a core allocation

Percent of advisors who 60% bought a smart beta ETF in the past year

Percent of advisors who plan to maintain or 99% increase smart beta usage over the next year

Page 41 Source: Cerulli 2015 ETF Markets Report, Cerulli Product & Strategies 2015 Report, 2015 ETF.com/BBH US Advisor Survey Diversification Based Investing (DBI)

Challenge 1 Challenge 2 Our Solution DBI identifies and diversifies • Macro factors like • Market cap weight across macro factors country and sector are exposes clients to significant drivers of concentration risk Greater diversification, along with asset equity return class returns and less downside risk • The result is a portfolio • Predicting the next with greater risk during macro event or market corrections country/sector that will outperform is difficult Legg Mason US Legg Mason Legg Mason Diversified Core Developed ex- Emerging ETF US Diversified Markets Core ETF Diversified Core ETF

Page 42 Source: Bloomberg. January 14, 2016. Legg Mason Low Volatility High Dividend ETF

Challenge 1 Challenge 2 Our Solution Combines low volatility factors with • 30 year secular decline in • Investors moving out on sustainable dividend attributes interest rates coupled the risk curve in a search with a return of market for income (MLPs, high Higher volatility can be a red flag for volatility yield, foreign bonds) potential dividend cuts and sustainable dividends support stock price stability

Legg Mason Low Volatility High Dividend ETF

Page 43 Source: Bloomberg. January 14, 2016. Legg Mason’s Global Distribution Footprint

17 distribution offices in Servicing over 100,000 Over 250 client-facing six regions intermediary clients team members globally

Zurich

Page 44 As of January 14, 2016 ActiveShares℠ - An Overview

 Will effectively combine the efficiencies of an ETF with the benefits of a mutual fund

 Like a mutual fund, ActiveShares℠ will provide the manager with the ability to generate alpha through confidential proprietary models, while creating significant improvements in efficiency (lower administrative costs, increased manager flexibility, and enhanced tax efficiency)

 When listed on regulated exchanges, ActiveShares℠ will provide all investors with unlimited entry and exit points during any trading day at self-determined prices

 Innovation that provides investors and managers with a better experience:

Investor Manager

• Real-time access to information • Increased investment flexibility • Real-time access to funds (exchange traded) • Ability to distribute securities in-kind • Greatly simplifies choice • In-kind creations limit cash drag • Held in traditional brokerage accounts • Simplification of account maintenance • Potential to utilize options and order-types to control risk

Page 45 Affiliate Overviews Carl McGann - Chief Operating Officer An - Introduction to Infrastructure

Source RARE - What Makes Us Different? Page 48 http://www.rareinfrastructure.com/about-rare/what-makes-us-different/ - Who Are We

Name Responsibilities Richard Elmslie Co-CEO and Co-CIO Nick Langley Co-CEO and Co-CIO Founded in 2006 by Carl McGann COO Richard Elmslie and Nick Shane Hurst Senior Analyst and Portfolio Manager Key staff Charles Hamieh Senior Analyst and Portfolio Manager Langley

Strategy aims to deliver AUM by strategy AUM by client the risk return of unlisted location

infrastructure assets New Zealand through listed securities 1% Large investment team of 15 focusing on fundamental research 51 employees across 4 Australia locations 66% Total AUM* = AUD 9.1B

* Data as of November 30, 2015 Page 49 - Points of Differentiation

1 2 3 4 RARE’s only We are Risk Adjusted Unique portfolio focus is listed infrastructure Returns to construction global specialists Equity (RARE) approach infrastructure managing funds are paramount provides long not fund in everything we term stable managers do returns managing infrastructure

Page 50 - Expected Growth of Infrastructure Assets

Assets set to grow by 124% and exceed USD 110T by 2030 Value of Global Infrastructure Assets by Sector Advanced Economy assets to almost double from USD 27T to over USD 50T Developing Economy Assets will almost triple from USD 22T to over USD 60T Private sector tipped to play a larger role in funding Expected USD 44T by 2030 Listed set to benefit - share already >40% of private Energy & Transportation sectors to drive growth.

Page 51 Source: As at 30 September 2015. David Hale Global Economics and RARE. - Our Ambition and Key Strategies

Be recognised as the preeminent infrastructure investment management firm globally. To achieve this we will focus on: Excellent investment outcomes, exceeding client service expectations and creating a high performance culture

Investment Performance – continue delivering medium/long-term performance (all key personnel locked in for 3-6 years) Emulate the success we have had in new key markets (US, Europe, Japan) – capture early mover advantage and diversify business Product development and rollout – leverage the Legg Mason network Expand marketing and sales support functions – ensure we can support the distribution network Staff communication and engagement – semi-annual off-sites, staff surveys and development plans Continue work on select product development – leveraging our core investment platform

Page 52 CLARION PARTNERS

REAL ESTATE INVESTMENT MANAGEMENT CLARION PARTNERS

200 NEWPORT AVENUE: QUINCY, MASSACHUSETTS

REAL ESTATE INVESTMENT MANAGEMENT WWW.CLARIONPARTNERS.COM WWW.CLARIONPARTNERS.COM -Overview

33-year track record − $40 billion in assets under management

Long-term above-benchmark performance

National operating platform Wells Fargo Plaza Houston, TX − 283 employees

Broad client base − 300 clients − 20% non-U.S.

600 N. Michigan Avenue Chicago, IL

Estimates as of December 31, 2015. Page 54 - Broad National Presence

1,043 assets, 9 offices INVESTMENT RESEARCH – 7 research specialists

Seattle ACQUISITIONS Boston – 29 acquisitions specialists New York ASSET MANAGEMENT Washington, DC – 62 asset management Los Angeles Atlanta specialists UNITED KINGDOM

Dallas London AuM STATEWIDE < $500 MM MEXICO $500 MM - $1,500 MM $1,500 MM + Mexico City1 BRAZIL OFFICES São Paulo HEADQUARTERS REGIONAL

Staffing data is as of December 31, 2015, all other information is as of September 30, 2015. Departmental staff counts do not include administrative personnel. Geographic information represents Gross Real Estate Value; compared to Firm-level Gross Asset Value. Please refer to the important disclosures at the beginning of this presentation. 1 Page 55 In addition to its U.S. offices, Clarion Partners has additional offices in São Paulo, London and a sub-advisor in Mexico City. - From Foundation in Separate Accounts, to Success in Funds

CLARION PARTNERS HISTORICAL ASSETS UNDER MANAGEMENT

$ Bn 40.0 $40.0

35.0 $33.1

$30.0 30.0 $27.9 51% Funds $25.7 $24.7 $24.3 25.0 $23.1 $21.5 $22.1 20.0 $19.0

15.0 $12.4

$9.9 10.0 $9.1 $7.7 $7.3 49% Separate Accounts

$4.8 5.0 $1.2 $1.7 $0.1 0.0

Separate Accounts Funds

As of December 31, 2015. Past performance is not indicative of future results. As of the 2nd Quarter 2014 the style of Clarion Partners’ asset reporting has changed from Gross Real Estate Value to Gross Asset Value. This change is being done in an effort to comply with industry standards and to present the most complete Page 56 description of assets managed. - Diversified Investment Offerings

– Investing across all real estate sectors, in both debt and equity positions

– Property types include office, industrial, residential, retail, and hotel

– Products are differentiated by risk profile

SECTOR1 RISK PROFILE2

Hotel Value-Add/ 5% Opportunistic 12% Multifamily Office 21% 30%

30% 58% Core

21% Core-Plus Retail 23% Industrial

1 Diversification percentages by property type are calculated using Gross Real Estate Value (GRE) Page 57 2 Diversification percentages are based on Gross Asset Value (GAV) at share. 33 year track record of creating and growing successful real estate investment platforms

1982-1983 Clarion Partners founded; Separate account business established

1995 Formed Clarion Real Estate Securities with the acquisition of an established REIT advisor; Launched Clarion Capital (Torchlight Investors) debt platform

1999 Expansion into fund management with the launch of the Clarion Ventures Series, an opportunistic, closed-end fund series

2000 Launch of the flagship core, open-end fund, the Lion Properties Fund

2002 Acquired existing private REIT to form Lion Industrial Trust, an open-end, core-plus industrial sector fund

2005 Acquired existing public REIT to form Lion Gables Apartment Fund, a closed-end multifamily fund; Launched Lion Value Fund, a value-add fund

2006 Launched Lion Mexico Fund, a closed-end fund exclusive to Mexico Formed Hospitality Group with takeover of $1.5Bn hotel portfolio

2012 Re-launched Debt Platform via a new closed-end fund and the addition of a dedicated team hired from DB Asset Management (formerly RREEF)

2015 Converted Gables Residential to form Clarion Gables Multifamily Trust, an open-end multifamily fund; Final closing for Campus-Clarion Student Housing Partners, a closed-end student housing sector fund; Initial closing held for CV4 and Debt Investment Fund

Page 58 - History of Consistent Performance Through Market Cycles

CLARION PARTNERS PROPERTY PERFORMANCE COMPARISON TO NCREIF AS OF SEPTEMBER 30, 2015

91 basis point outperformance since inception (DeLevered)

Comparison of Clarion Partners’ property performance (gross of fees) with that of the NCREIF Property Index (“NPI”). Past performance is not indicative of future results and a risk of loss exists. The above is shown as supplemental to Page 59 Fund performance. MARKET UPDATE

REAL ESTATE INVESTMENT MANAGEMENT CLARION PARTNERS

200 NEWPORT AVENUE: QUINCY, MASSACHUSETTS

REAL ESTATE INVESTMENT MANAGEMENT WWW.CLARIONPARTNERS.COM WWW.CLARIONPARTNERS.COM Private Real Estate Investment Has Generated Attractive Performance…

ANNUALIZED TOTAL RETURNS AND INFLATION

16% NCREIF Property Index

14% 13.5% 13.3% S&P 500 Index

12.4% 12.5% Barclays US Aggregate Bond 11.9% 12% Index

9.8% 10%

8.0% 8.2% 8% 6.8%

6% 5.6% 4.6%

4% 2.9% 3.1% 1.7% Annualized Total Return Total Annualized 2% -0.6%

0% 1-Year 3-Year 5-Year 10-Year 20-Year -2%

Source: Bureau of Labor Statistics, NCREIF, Clarion Partners Investment Research, Q3 2015. Q4 data not yet available. Note: Inflation is calculated using the Consumer Price Index For All Urban Consumers (CPI-U), excluding Food and Page 61 Energy; past performance is not indicative of future performance. …With Uniquely Low Correlations with Stocks and Bonds, Reinforcing the Role of Real Estate in Institutional Portfolios…

20-YEAR PRIVATE REAL ESTATE CORRELATIONS (1995-2014)

NCREIF NAREIT EQUITY RUSSELL BARCLAYS AGG. MORGAN STANLEY NPI INDEX S&P 500 2000 BOND INDEX EAFE NCREIF NPI 1.00 NAREIT Equity Index 0.22 1.00 S&P 500 0.20 0.58 1.00 Russell 2000 0.15 0.69 0.90 1.00 Barclays Agg. Bond Index (0.10) 0.00 (0.27) (0.32) 1.00 Morgan Stanley EAFE Int'l Stock 0.16 0.54 0.86 0.82 (0.27) 1.00

Source: NCREIF, NAREIT, S&P, Russell, Barclays Capital, MSCI, Clarion Partners Investment Research, data from 1Q1995 to 4Q 2014. 2015 data not available. Note: NCREIF Property Index (NPI) is used as a performance benchmark for core real estate (stabilized institutional quality Page 62 assets). Past performance is not indicative of future performance. …Supporting Increasing Real Estate Target Allocations From Institutional Investors

– Foreign investments into the U.S. have also increased rapidly; easing of FIRPTA is expected to accelerate this trend

REAL ESTATE AS % OF INSTITUTIONAL INVESTOR TARGET ALLOCATION

12%

9.4% 9.6% 8.8% Actual 8% 8.5%

5.6% 5.2% 4.5% 3.7% 4% 3.2% 2.9% 2.1%

0% 1980 1985 1990 1995 2000 2005 2010 2013 2014 2015

Source: Cornell University Baker Program In Real Estate, Hodes Weill & Associates, 2015 Institutional Real Estate Page 63 Allocations Monitor, December 2015. Clarion Research - Demand Forecasting

- Base Case 2.0-2.5% GDP Growth - Mild Downside 0.5-1.0% (25% probability)

Job Growth Spending

Which metros? Structural vs. Cyclical? Corporate Consumers Quality of Jobs?

Impact by Property Type?

Apartment Industrial Office Retail Hotel

Source: Clarion Partners Investment Research, January 2016. Page 64 Slow and Steady U.S. Economic Growth Increases Potential for a Prolonged Business Cycle

CUMULATIVE U.S. REAL GDP GROWTH FOLLOWING RECESSIONS (POST-WAR PERIOD)

1961-1969 50 1991-2000 1982-1990 40 (%) 30

1970-1973 1975-1979

Cumulative GDP Growth Cumulative GDP 20 1958-1960 2001-2007 1954-1957 2009-? 1980-1981 10

0 0 4 8 1216202428323640 Quarters from GDP Trough

Source: Bureau of Economic Analysis, RBC Capital Markets, Clarion Partners Investment Research, Q4 2015. Note: Past performance is not indicative of future performance. Forecasts have certain inherent limitations and are based on complex calculations and formulas that contain substantial subjectivity and should not be relied Page 65 upon as being indicative of future performance. Please refer to important disclosures at the front of this presentation. Employment Well Above Prior Peak in Most Metros, Led by Tech and Texas Markets

JOB LOSS AND RECOVERY BY MARKET

30% Trough to Today Peak to Trough Peak to Today Tech Markets (1/08) 25% (2/10)

20% U.S. 15%

10%

-5%

-10%

-15% Miami Dallas Austin Tampa Boston Detroit Tucson Seattle Atlanta Denver Raleigh Newark Phoenix Orlando Chicago Oakland Houston Portland Hartford St. Louis St. San Jose Nashville Riverside Charlotte Stamford New York Baltimore Cleveland Cincinnati Columbus Las Vegas Pittsburgh San Diego Fort Worth Long Island Long Kansas City Minneapolis Jacksonville Los Angeles Philadelphia Sacramento Indianapolis San Antonio United States San Francisco Salt Lake City Salt Lake Orange County Fort Lauderdale Washington, DC West Palm Beach

Source: Moody’s Analytics, Clarion Partners Investment Research, November 2015. Note: Past performance is not indicative of future performance. Page 66 Job Loss and Pace of Recovery Vary Dramatically by Industry – Cyclical vs. Structural?

JOB CHANGES FROM PRIOR PEAK January 2008 Job Change (since 1/08) #% 130 Tech +920 +29.5% 125

120 Edu./Health +3,402 +18.0% 115 Leis./Hosp. +1,796 +13.3%

110 Prof/Bus Svc* +1,934 +10.7% 105 Energy +44 +5.9% Trade/Trans/Util +369 +1.4% 100 Government -404 -1.8% 95 Finance -92 -1.1% Info./Media -225 -7.4% 90 Manu. -1,402 -10.2% 85 Construction -983 -13.1%

Employment Index (Jan. 2008 100) = 80

70 2008 2009 2010 2011 2012 2013 2014 2015

Source: Bureau of Labor Statistics, Clarion Partners Investment Research, November 2015. Page 67 Note: Past performance is not indicative of future performance. Employment Well Above Prior Peak in Most Metros, Led by Tech and Texas Markets

Apartment: - 75 million Millennials – the largest rental age cohort in history - Home ownership decline - 69% in 2006 to 63.4% in Q3 2015

Industrial: - U.S. consumer spending strong, 19% above prior peak - E-commerce continues to rapidly increase market share of total retail sales (9% in 2015)

Office: - Technology and creative industries lead space demand - Re-urbanization driven by Millennials who prefer cities/dense urban nodes for “live, work, and play”

Retail: - Retail sales growing at about 3% annually, supported by solid household formation, strong job growth, and rising net worth - Dominant class A malls, high-street, and value/discount retail outperforming

Source: Clarion Partners Investment Research, January 2016. Note: Past performance is not indicative of future performance. Forecasts have certain inherent limitations and are based on complex calculations and formulas that contain substantial subjectivity and should not be relied Page 68 upon as being indicative of future performance. Please see important information regarding forecasts and in respect of risk factors at the beginning of this presentation. New Supply Remains Well Below Historic Averages; Significantly Below Demand

ANNUAL NEW SUPPLY MUCH LOWER SPACE DEMAND HAS EXCEEDED SUPPLY COMPARED TO LONG-TERM AVERAGE SIGNIFICANTLY SINCE 2010

2010-15 AVG. AS % OF STOCK DEMAND/SUPPLY 5% SECTOR DEMAND SUPPLY RATIO

Apartment 1.24% 0.91% 1.4 4% Industrial 1.32% 0.59% 2.2 Office 1.02% 0.55% 1.9 3% 1985-2009 Avg. = 2.3% Retail 0.63% 0.43% 1.5 Total 1.05% 0.62% 1.7

2% Note: Demand = net absorption 2010-2019F Avg. = 0.8%

1% Annual Deliveries Deliveries as %Stock Annual

0% 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015F 2017F 2019F

Source: CBRE-EA, Axiometrics, Clarion Partners Investment Research, as of Q3 2015. Note: Deliveries include industrial, multifamily, office and retail sectors. Long-term average (LTA) is calculated from 1985-2014 for all property types, except hotels, which is 1998-2014. Hotel forecast is from PFK Hospitality 69 Research. Past performance is not indicative of future performance. Forecasts have certain inherent limitations and are based on complex calculations and formulas that contain substantial subjectivity and should not be relied upon Page 69 as being indicative of future performance. Please see important information regarding forecasts and projections at the beginning of this presentation. Strong Property Total Returns Primarily Driven by Accelerating Rent and Net Operating Income Growth

NCREIF SAME-STORE NOI GROWTH NCREIF PROPERTY INDEX (NPI) TOTAL RETURNS (TRAILING 4 QUARTERS) (TRAILING 4 QUARTERS)

20% Capital Market NOI Growth 5% 4.4% Recovery Acceleration 4% 15% 13.5% 3%

2% 10%

1% 5% 0% NPI Total Returns

-1%

Same-Store NOI Growth 0% -2%

-3% -5% 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015

Source: NCREIF, Clarion Partners Investment Research, as of Q3 2015. Q4 data not yet available. Note: Past performance is not indicative of future performance. NOI growth is calculated using trailing four quarters year over year. Page 70 U.S. Economy is in Expansion Phase, But Property Values in Real Terms Still Below Prior Peak

U.S. REAL GDP AND NPI MARKET VALUE INDEX CHANGES

115

110 Real GDP 109 105

100

95 96

85 Real NPI 3.9% below

Index (Q4 2007 = 100) 80 prior peak

70 Q4 2007 Q2 2008 Q4 2008 Q2 2009 Q4 2009 Q2 2010 Q4 2010 Q2 2011 Q4 2011 Q2 2012 Q4 2012 Q2 2013 Q4 2013 Q2 2014 Q4 2014 Q2 2015

Source: Moody’s Analytics, NCREIF, Clarion Partners Investment Research, Q3 2015. Q4 data not yet available. Note: Real NPI as shown represents the NCREIF Property Market Value Index; real values were calculated with inflation taken out. Past performance is not indicative of future performance. Page 71 History Shows Private Real Estate Values Not Always Adversely Affected In Rising Interest Rate Environments

Source: NCREIF, Federal Reserve, S&P, Clarion Partners Investment Research, Q3 2015, Q4 data not yet available Note: Returns and GDP growth are annualized over the period of rising rates; Past performance is not indicative of Page 72 future performance. U.S. Real Estate Cycles Historically Last More Than 10 Years YTD 2015 NPI Total Return 10.1%, Driven by Higher NOI Growth

NCREIF PROPERTY INDEX TOTAL RETURN HISTORY Annual Return

Source: Clarion Partners Investment Research, NCREIF, December 2015. Note: LTA = long-term average, 1978-2014. 1978 is the NCREIF Property Index inception year. NPI Index represents unleveraged property level investment performance gross of investment management fees. Please see important information regarding forecasts and projections at the beginning of this presentation. Past performance is not indicative Page 73 of future performance. Forecasts have certain inherent limitations and are based on complex calculations and formulas that contain substantial subjectivity and should not be relied upon as being indicative of future performance. Draft 4/25/2014 8:01 PM CONCLUSION

REAL ESTATE INVESTMENT MANAGEMENT CLARION PARTNERS

200 NEWPORT AVENUE: QUINCY, MASSACHUSETTS

REAL ESTATE INVESTMENT MANAGEMENT WWW.CLARIONPARTNERS.COM WWW.CLARIONPARTNERS.COM - Strength of a Legg Mason Affiliation

• Long-term, strategic partner

• Strong cultural fit and management alignment

• Pure-play global asset manager

• Expansion through global retail distribution platform 390 Madison Avenue New York, NY

• Seamless transition with shared fiduciary focus on client investment performance

• Clarion autonomy and brand remain consistent with Legg Mason’s independent multi-manager business model American Stock Exchange New York, NY

Page 75 EnTrustPermal

Investor Day Presentation A Powerhouse in Alternatives • EnTrustPermal will have the scale, global talent and resources to springboard meaningful innovation for our investors in a dynamic industry • The merger of EnTrust and Permal creates one of the world’s largest and comprehensive global hedge fund businesses1

― Institutional investors are seeking fewer relationships which requires global scale Size ― Top 5 global hedge fund investor1 in alternatives with approximately $29 billion2 in total assets Matters ― Increased research capabilities to source superior investment opportunities ― Greater scale to negotiate lower manager fees for its investors

Unparalleled ― A combined team of over 55 investment professionals and 11 offices worldwide3 Reach ― Approximately 200 manager relationships consisting of over 350 investment partnerships Globally ― Over 4,300 investors across the globe including over 700 institutional investors Diversified ― Approximately 90 consultant relationships with over 200 distribution partners worldwide Investor Base

Bespoke and ― Over 55 customized investor partnerships tailored for institutional clients Proprietary ― 180 bespoke manager vehicles with negotiated fees and preferential terms on over 60% of total assets Investments ― Invested in 132 co-investments since 2007

Investor-Centric ― Unwavering commitment to innovation and exceptional client service with a keen focus on Cultures performance, risk management and transparency

1 Preqin Quarterly Update Q1 2015. 2 Including awarded but not yet funded mandates and assets under advisement. Page 77 3 As of January 22, 2016. Please see disclosures in appendix EnTrust Capital • EnTrust manages approximately $12 billion1 in total assets for more than 450 institutional investors and has 75 employees

• Gregg S. Hymowitz, Managing Partner, co-founded EnTrust in 1997 following his investment career at Goldman Sachs & Co.

• EnTrust manages over $4 billion in bespoke investor partnerships, with approximately $5 billion in long duration co-investment and opportunistic capital

• EnTrust has proven to be a stable investment partner, with net inflows of approximately $5 billion since 2008, and with over 40% of our average annual inflows from existing investors

• EnTrust has been able to grow its management and incentive fee revenue by creating innovative and market differentiated value for its investors

• EnTrust Capital is SEC registered and is headquartered in New York, with offices in Chicago, Washington, D.C., Boston, Medfield, London, Singapore and Dubai

1 As of December 31, 2015, including AUM, AUA, & unfunded contractually committed assets Page 78 Please see disclosures in appendix EnTrust Has Grown Through Innovation

• EnTrust assets have experienced 18% CAGR since 2007

• EnTrust has grown the number of institutional accounts by 467% since 2007

EnTrust Assets ($B) By Strategy Number of Institutional Accounts

$14 500 476 $12.1 $12 450 $10.6 400 $10 $9.5 369 350 334 304 $8.1 288 $8 300 $6.4 250 $6 $5.2 200 $4.1 151 150 $4 130 $3.2 $3.0 150 100 84 $2 50 $0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2007 2008 2009 2010 2011 2012 2013 2014 2015

As of December 31, 2015, including awarded but not yet funded mandates Please see disclosures in appendix Page 79 EnTrustPermal • EnTrustPermal combines the best investment, management and operational talent, drawing equally from both organizations • The Global Investment Committee will be chaired by Gregg S. Hymowitz and comprised of the current senior investment professionals from both organizations • EnTrustPermal will be 65% owned by Legg Mason and 35% by Mr. Hymowitz, who will reinvest a material amount of the after-tax consideration from the combination into EnTrustPermal investment funds • EnTrustPermal will retain its owner-level attention and boutique approach while benefitting from the support and infrastructure of Legg Mason • Mr. Hymowitz and senior employees from both organizations have committed to employment agreements Management Committee

Gregg S. Hymowitz François Becquaert Shane Clifford Jill Daschle Bruce P. Gimpel Bruce Kahne Chairman and Chief Financial Global Head Global Head of Sales Chief Operating General Counsel and Chief Executive Officer Officer of Corporate and Distribution Officer Chief Compliance Officer Strategy U.S.

Christopher T. Keenan Omar Kodmani Michael J. McDonough Greg Tarpinian Jill Zelenko Christopher Zuehlsdorff Co-Head of Global Global Head General Counsel and Head of North American Global Chief Risk Co-Head of Global Investments of International Business Chief Compliance Officer Institutional Sales Officer Investments Development International

Global Investment Committee

Gregg S. Hymowitz Christopher T. Keenan Christopher Zuehlsdorff Jeffrey Chan Javier Dyer Robert Kaplan Chairman and Co-Head of Global Co-Head of Global Senior Managing Senior Managing Senior Managing Chief Executive Officer Investments Investments Director Director Director

Orange = EnTrust Page 80 Blue = Permal Please see disclosures in appendix Globally Diversified Institutional Investor Base

• EnTrustPermal has a diverse investor base by both investor type and geography

705 institutional partners investing approximately $24.6B1

1 Including awarded but not yet funded mandates and assets under advisement. 2 Total removes overlap in institutional partnerships Page 81 Please see disclosures in appendix Broad and Deep Manager Relationships

• EnTrustPermal has cultivated deep relationships with nearly 200 hedge funds across the globe and in every major alternative investment strategy

• EnTrustPermal provides investors with a unique breadth of alternative investment opportunities

EnTrustPermal Total Manager Count: 1981 Credit Equity Event Driven Macro Multi-Strategy Manager Breakdown by Geography 45 Managers 61 Managers 47 Managers 31 Managers 14 Managers

Credit Arbitrage Equity Long Biased Activist Commodities Multi-Strategy 1 13 17 4 14

Credit Long Bias Equity Long Only Merger Arbitrage Discretionary 9 9 1 17

Credit Long / Short Equity Long / Short Multi-Strategy Systematic 7 38 6 7

Distressed Equity Market Neutral PE / Regulation D Thematic 13 1 14 2

EM Debt Special Situations Volatility Arbitrage 3 9 1

Multi-Strategy 5

Structured Credit 7

Page 82 1 Totals remove overlap in manager count Please see disclosures in appendix EnTrustPermal: Alternative Asset Manager Innovator

• The $3 trillion hedge fund industry is moving towards bespoke accounts at both the investor and manager level, requiring proprietary co-investment opportunities and unique market differentiated direct investments

• EnTrustPermal will leverage its broadened expertise and scale to provide investors with expanded investment opportunities that fit these evolving goals while continuing to negotiate even lower fees and better terms for its investors

• EnTrustPermal will enhance its current lines of business and innovate “next-generation” alternatives investments

― Bespoke investor-level partnerships ― Customized hedge fund manager vehicles ― Proprietary and opportunistic co-investments ― Market differentiated direct investments

Please see disclosures in appendix Page 83 Bespoke Investor Partnerships • EnTrustPermal has expertise in creating and managing customized mandates for institutional investors • Over 55 customized investor partnerships totaling approximately $10B of AUM, tailored by strategy, legal structure, liquidity, terms, fees and geography to meet specific institutional investor guidelines and objectives ― Bespoke mandates ranging from diversified multi-strategy to concentrated single-strategy portfolios ― Customized fee schedules allow investors to further align interests by incorporating benchmarks, incentive fees, hurdles and/or preferred returns • EnTrustPermal’s unrivaled capabilities will greatly increase its ability to tailor investor vehicles across all major alternative investment strategies

EnTrustPermal’s Top 10 Bespoke Institutional Funds Investor Type Geographic Location Investment Strategy AUM ($M) Multi-Employer Pension U.S. Macro $981 Public Pension U.S. Co-Investment $610 Public Pension U.S. Credit $554 Public Pension U.S. Equity Focused $532 Insurance Europe Concentrated Multi-Strategy $512 85% Multi-Strategy Sovereign Wealth Middle East $470 15% Co-Investment Public Pension U.S. Diversified $448 Corporate Pension U.S. Credit $422 85% Concentrated Multi-Strategy Multi-Employer Pension U.S. $381 15% Co-Investment 70% Concentrated Multi-Strategy Public Pension U.S. $362 30% Co-Investment

Page 84 Please see disclosures in appendix Customized Hedge Fund Manager Partnerships • Customized manager funds can be tailored to target specific strategies and overweight managers’ “best ideas”

• Such funds provide EnTrustPermal investors with lower fees, improved liquidity and a higher level of control and transparency • EnTrustPermal has created 180 customized manager vehicles that are not available to outside investors • EnTrustPermal will leverage its position as a top 5 hedge fund investor1 to negotiate even lower fees and better terms with our underlying managers on behalf of our clients

EnTrustPermal Fee Analysis2

Management Fee Incentive Fee

Assets with Preferential Terms (%) 60% 74%

Weighted Average Fee 1.17% 15.53%

Discount to 2% and 20% 41.5% 22.4%

1 Preqin Quarterly Update Q1 2015. 2 Fee savings calculated using the weighted average of fee discounts on Permal’s Managed Account Platform and all of Page 85 EnTrust’s invested vehicles where beneficial fee terms have been agreed to with underlying managers. Please see disclosures in appendix Opportunistic Co-investments

• EnTrustPermal has a record of sourcing “best idea” co-investments across the hedge fund industry, nearly half of which are proprietary and not available to other investors

• These opportunistic co-investments generally have a two-to-four year investment horizon and require stable, longer-duration, locked-up institutional capital

• EnTrustPermal’s increased scale will enhance its ability to source such co-investments globally and extract even deeper fee discounts

132 Co-Investments since 2007 # of Co-Investments

Page 86 Please see disclosures in appendix EnTrustPermal

• EnTrustPermal will be a top 5 global hedge fund investor1 with approximately $29 billion2 in total assets • A global institutional and retail investor base of over 4,300 clients, including over 700 institutional accounts • Comprehensive investment reach with over 55 investment professionals and 11 global offices covering nearly 200 manager relationships across all major alternative investment strategies • Leader in creating bespoke investment vehicles for global institutional investors • Leader in structuring and investing in customized investment portfolios with managers that have tailored investment strategies, “best ideas” and lower fees • Leader in sourcing, diligencing and executing proprietary and opportunistic co-investments • EnTrustPermal has the scale and resources to springboard meaningful innovation in a dynamic industry

1 Preqin Quarterly Update Q1 2015. Page 87 2 Including awarded but not yet funded mandates and assets under advisement Please see disclosures in appendix Appendix Appendix – Significant Tax Benefit $2.8B of Future Income Sheltered

$5 50%

$4 40% 36% $2.8B 30% $3

20% Billions in $ $2 $1.6 $1.1B

10% $1 5% $0.6 $1.2 $0.5 0% $0 FY16 Projected Tax Shield Tax Benefit

Normal GAAP Tax Rate Cash Tax Rate NOL/FTC Purchased Goodwill and intangibles

• Actual F3Q16 effective GAAP tax rate of • Future income of $2.8B is sheltered 43% driven by non-cash impairment charge from state and federal income tax, • Lower cash tax rate due to higher based on usage of NOL, FTC anticipated use of tax shield in FY16 carryforwards and amortization of tax deductible goodwill and intangibles

Data as of December 31, 2015 Page 89 * Excludes the impact of CIVs Investment Performance

% of Strategy AUM beating Benchmark1 % of Long-Term U.S. Fund Assets beating Lipper Category Average2

91% 10 Yr 88% 71% 88% 10 Yr 62% 86% 60% 5 Yr 85% 60% 83% 5 Yr 67% 72% 85% 3 Yr 84% 63% 3 Yr 80% 55% 63% 75% 62% 1 Yr 44% 1 Yr 48% 60% 43%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%0%10%20%30%40%50%60%70%80%90%100%

Dec 14 Sep 15 Dec 15 Dec 14 Sep 15 Dec 15

1 See appendix for details regarding strategy performance 2 Includes open-end, closed-end, and variable annuity funds. Source: Lipper Inc.

Past performance is no guarantee of future results. The information shown above does not reflect the performance of any specific fund. Individual fund performance will differ.

Page 90 Appendix – GAAP Reconciliation Adjusted Income1

Quarters Ended Nine Months Ended ($ millions, except per share amounts) Dec 15 Sep 15 Dec 14 Dec 15 Dec 14 Net Income (loss) Attributable to Legg Mason, Inc. $ (138.6) $ 64.3 $ 77.0 $ 20.2 $ 154.1 Plus (less): Amortization of intangible assets 1.6 0.7 0.7 3.0 2.0 Impairment charges 371.0 - - 371.0 - Contingent consideration fair value adjustment (26.4) - - (26.4) - Deferred income taxes on intangible assets: Impairment charges (74.2) - - (74.2) - Tax Amortization benefit 33.5 34.1 35.4 101.8 104.8 UK tax rate adjustment (8.4) - - (8.4) - Adjusted Income $ 158.5 $ 99.1 $ 113.1 $ 387.0 $ 260.9

Net Income (loss) per Diluted Share Attributable to Legg Mason, Inc. $ (1.31) $ 0.58 $ 0.67 $ 0.17 $ 1.32 Plus (less): Amortization of intangible assets 0.01 - 0.01 0.03 0.02 Impairment charges 3.49 - - 3.41 - Contingent consideration fair value adjustment (0.25) - - (0.24) - Deferred income taxes on intangible assets: Impairment charges (0.70) - - (0.68) - Tax amortization benefit 0.31 0.31 0.30 0.94 0.89 UK tax rate adjustment (0.08) - - (0.08) - Adjustment to include particpating securities (0.02) - - (0.08) - Adjusted Income per Diluted Share $ 1.45 $ 0.89 $ 0.98 $ 3.47 $ 2.23

1 See explanations for Use of Supplemental Non-GAAP Financial Information in earnings release.

Page 91 Appendix – GAAP Reconciliation Operating Margin, as adjusted1

Quarters Ended

($ millions) Dec 13 Mar 14 Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Operating Revenues, GAAP basis $ 720.1 $ 681.4 $ 693.9 $ 703.9 $ 719.0 $ 702.3 $ 708.6 $ 673.1 $ 659.6 Plus (less): Operating revenues eliminated upon consolidation of investment vehicles 0.5 0.3 0.2 0.2 0.2 0.2 0.1 0.1 0.1 Distribution and servicing expense excluding consolidated investment vehicles (148.8) (144.9) (148.7) (155.1) (147.5) (143.5) (149.3) (138.9) (132.9) Operating Revenues, as Adjusted $ 571.8 $ 536.8 $ 545.4 $ 549.0 $ 571.7 $ 559.0 $ 559.4 $ 534.3 $ 526.8

Operating Income (Loss), GAAP basis $ 121.7 $ 119.3 $ 119.6 $ 130.4 $ 119.4 $ 128.9 $ 124.5 $ 133.0 $ (240.6) Plus (less): Gains (losses) on deferred compensation and seed investments, net 6.5 4.4 4.5 (0.4) 2.1 3.1 1.2 (5.5) 2.7 Contingent consideration fair value adjustment 5.0 ------(26.4) Amortization of intangible assets 4.2 0.9 0.9 0.5 0.7 0.6 0.7 0.7 1.6 Impairment of intangible assets ------371.0 Operating income of consolidated investment vehicles, net 0.6 0.5 0.2 0.2 0.2 0.3 0.1 0.1 0.1 Operating Income, as Adjusted $ 138.0 $ 125.1 $ 125.2 $ 130.7 $ 122.4 $ 132.9 $ 126.5 $ 128.3 $ 108.4

Operating Margin, GAAP basis 16.9% 17.5% 17.2% 18.5% 16.6% 18.4% 17.6% 19.8% (36.5%) Operating Margin, as Adjusted 24.1% 23.3% 23.0% 23.8% 21.4% 23.8% 22.6% 24.0% 20.6%

1 See explanations for Use of Supplemental Data as Non-GAAP Financial Information in earnings release.

Page 92 Appendix - Asset & Revenue Diversity

Total AUM $671B

28% 24% 37% By Asset By Client By Client 55% Class Domicile Type 17% 63% 76%

Institutiona l Retail Fi xed Income Equity Li qui dity US Non-US

FYTD 16 Operating Revenues $2.0B

35% 40% By Asset By Client By Client 47% 48% Class Domicile 52% Type 65%

4% 9%

Fixed Income Equity Alternative Liq uid ity US Non-US Institutiona l Retail

Page 93 Data as of December 31, 2015 Appendix – Additional Investment Performance Detail % of Strategy AUM Beating Benchmark1

December 31, 2015 December 31, 2014

1-Year 3-Year 5-Year 10-Year 1-Year 3-Year 5-Year 10-Year

Total (includes liquidity) 60% 80% 83% 88% 75% 85% 86% 91%

Equity:

Large cap 32% 67% 64% 90% 57% 61% 75% 88%

Small cap 18% 16% 27% 39% 10% 28% 22% 69%

Total Equity (includes other equity) 38% 60% 63% 80% 47% 59% 64% 82%

Fixed Income:

US taxable 72% 86% 86% 87% 74% 94% 93% 88%

US tax-exempt 100% 100% 100% 100% 100% 100% 100% 100%

Global taxable 21% 76% 86% 84% 83% 89% 88% 94%

Total Fixed Income 57% 83% 87% 87% 79% 92% 92% 91%

1 See appendix for details regarding strategy performance. Past performance is no guarantee of future results. The information shown above does not reflect the performance of any specific iiifund. Individual fund performance will differ

Page 94 Appendix – Additional Investment Performance Detail % of Long-Term U.S. Fund Assets beating Lipper Category Average1

December 31, 2015 December 31, 2014

1-Year 3-Year 5-Year 10-Year 1-Year 3-Year 5-Year 10-Year

Total (excludes liquidity) 43% 63% 72% 60% 62% 63% 60% 71%

Equity:

Large cap 31% 79% 87% 47% 76% 79% 70% 66%

Small cap 12% 23% 18% 51% 19% 23% 22% 72%

Total Equity (includes other equity) 33% 61% 66% 48% 53% 56% 52% 66%

Fixed Income:

US taxable 81% 84% 84% 78% 79% 84% 84% 82%

US tax-exempt 23% 50% 72% 89% 69% 55% 58% 86%

Global taxable 33% 36% 81% 20% 85% 86% 80% 54%

Total Fixed Income 58% 67% 80% 78% 77% 75% 75% 81%

1 Includes open-end, closed-end, and variable annuity funds. Source: Lipper Inc. Past performance is no guarantee of future results. The information shown above does not reflect the iiiiperformance of any specific fund. Individual fund performance will differ

Page 95 Appendix – Strategy Performance

For purposes of investment performance comparisons, strategies are an aggregation of discretionary portfolios (separate accounts, investment funds, and other products) into a single group that represents a particular investment objective. In the case of separate accounts, the investment performance of the account is based upon the performance of the strategy to which the account has been assigned. Each of our asset managers has its own specific guidelines for including portfolios in their strategies. For those managers which manage both separate accounts and investment funds in the same strategy, the performance comparison for all of the assets is based upon the performance of the separate account.

Approximately ninety percent of total AUM is included in strategy AUM as of December 31, 2015, although not all strategies have three, five, and ten year histories. Total strategy AUM includes liquidity assets. Certain assets are not included in reported performance comparisons. These include: accounts that are not managed in accordance with the guidelines outlined above; accounts in strategies not marketed to potential clients; accounts that have not yet been assigned to a strategy; and certain smaller products at some of our affiliates.

Past performance is not indicative of future results. For AUM included in institutional and retail separate accounts and investment funds managed in the same strategy as separate accounts, performance comparisons are based on gross-of-fee performance. For investment funds (including fund-of-hedge funds) which are not managed in a separate account format, performance comparisons are based on net-of-fee performance. These performance comparisons do not reflect the actual performance of any specific separate account or investment fund; individual separate account and investment fund performance may differ. The information in this presentation is provided solely for use in connection with this presentation, and is not directed toward existing or potential clients of Legg Mason.

Page 96 Appendix – EBITDA, Bank Defined

Twelve Months Ended Dec 15 Mar 15 Mar 14 Mar 13 Mar 12

1 Cash provided by operating activities $493 $568 $437 $303 $497 Allocation of debt redemption payments - 98 - 216 - Interest expense, net of certain non-cash items 46 54 50 48 41 Current tax expense 21 25 19 6 23 Gain on investments 13 51 27 38 20 Net change of other assets and liabilities 84 (111) 84 (56) 4

EBITDA, Bank Defined $657 $685 $617 $555 $585

1 See annual report on Form 10-K for the respective years then ended and the quarterly report on Form 10-Q for Page 97 the respective quarters. Appendix - Actively Building a Better Legg Mason

140%

Affiliates/New • Acquired QS Investors (Multi-asset), combined with Batterymarch & LMGAA 120% Product Areas • Acquired Martin Currie (Global/Int’l Equity) • Acquired RARE (Infrastructure) • Fauchier acquired & merged with Permal 100% • Divested non-core affiliates (PCM, LMIC, Esemplia) • Combined LM Capital Management with Clearbridge • Increased Next Generation product offerings • Launched 4 new Smart Beta ETF products 80% Strategic Hires • Tom Hoops appointed Head of Business Development • Hired Rick Genoni and Brandon Clark, seasoned ETF professionals Distribution • Increased investment in distribution 60% • Nine consecutive quarter of positive net sales Dec-12 to Dec-15 Management Equity • Implemented MEPs at ClearBridge and Permal Stock Price Performance Stock Price Plans 40% Balance Sheet • Refinanced debt and extended maturities to 10 and 30 years +8.5%

Capital Return • Best in industry rate of capital return 20% • Returned over $1.2B to investors over the past 3 years Flows • Six of last seven quarters of long-term inflows

0% Dec‐12 Mar‐13 Jun‐13 Sep‐13 Dec‐13 Mar‐14 Jun‐14 Sep‐14 Dec‐14 Mar‐15 Jun‐15 Sep‐15 Dec‐15 Legg Mason SNL Asset Manager Index

Note: Returns are 12/31/2012 through 1/15/2016 Page 98 - Disclosures

PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS.

This document may contain confidential and private proprietary and/or legally privileged information. Any further distribution, copying or other use of any contents of the information contained herein is prohibited.

Charts, tables and graphs contained in this document are not intended to be used to assist the reader in determining which securities to buy or sell or when to buy or sell securities.

There is no guarantee that negotiations with underlying managers will lead to fee reductions or that any target fee reductions or performance returns will be achieved.

There is no guarantee that any particular managers will be in any investment portfolios or that manager and strategy allocations will approximate the data herein.

Page 99 - Disclosures

Important information While the information contained in this document has been prepared with all reasonable care, neither RARE Infrastructure Limited (“RARE”), RARE Infrastructure North America Pty Limited (“RINA”), RARE Infrastructure USA, Inc. (“RARE USA”) nor RARE Infrastructure (UK) Limited (“RARE UK”) accept any responsibility or liability for any errors, omissions or misstatements however caused. This information is not personal advice. This information has been prepared without taking account of your objectives, financial situation or needs. Investors should be aware that past performance is not indicative of future performance. Returns can be volatile, reflecting rises and falls in the value of underlying investments. Potential investors should seek independent advice as to the suitability of the Fund to their investment needs. The fact that shares in a particular company may have been mentioned should not be interpreted as a recommendation to buy, sell or hold that stock. Any prospective PE ratios and dividend yields or forecasts referred to in this presentation constitute estimates which have been calculated by the RARE Infrastructure investment team based on RARE’s investment processes and research. Additional important information for potential or existing investors in United States RINA is registered as investment adviser, and RARE USA is registered as a relying adviser with the US Securities and Exchange Commission (“SEC”). Registration as an investment adviser with the SEC does not imply a certain level of skill or training. The information in this presentation has not been approved or verified by the SEC. The information in this presentation is for informational and educational purposes only. This presentation is neither an offer to sell nor a solicitation of an offer to buy units or limited partnership interests in any of the investment funds managed by RINA or RARE USA. An offer can only be made by an offering memorandum for the relevant investment fund and only in jurisdictions in which such an offer would be lawful. The offering memorandum contains important information concerning the risks associated with an investment in the investment funds and must be read carefully before deciding whether to invest in any fund. A list can be made available of all securities acquired or disposed of during the past 12 months for the portfolio referred to in this document.

Page 100 - Disclosures

© Western Asset Management Company 2016. This presentation is the property of Western Asset Management Company and is intended for the sole use of its clients, consultants, and other intended recipients. It should not be forwarded to any other person. Contents herein should be treated as confidential and proprietary information. This material may not be reproduced or used in any form or medium without express written permission. Past results are not indicative of future investment results. This presentation is for informational purposes only and reflects the current opinions of Western Asset Management. Information contained herein is believed to be accurate, but cannot be guaranteed. Opinions represented are not intended as an offer or solicitation with respect to the purchase or sale of any security and are subject to change without notice. Statements in this material should not be considered investment advice. Employees and/or clients of Western Asset Management may have a position in the securities mentioned. This presentation has been prepared without taking into account your objectives, financial situation or needs. Before acting on this information, you should consider its appropriateness having regard to your objectives, financial situation or needs. It is your responsibility to be aware of and observe the applicable laws and regulations of your country of residence.

Page 101 Joseph Sullivan

Chief Executive Officer

Joseph Sullivan is Chairman and Chief Executive Officer of Legg Mason, Inc., a global asset management firm listed on the New York Stock Exchange. Mr. Sullivan also serves as a current Trustee and former Chair of the Securities Industry Institute, was a former Chair of the Fixed Income Committee of the National Association of Securities Dealers (NASD), a Board Member of the Bond Market Association and a member of the New York Stock Exchange (NYSE) Hearing Board.

Mr. Sullivan joined Legg Mason in September 2008 and, after serving as Head of Global Distribution and Chief Administrative Officer, was appointed interim Chief Executive Officer as of October 2012. Before joining Legg Mason, he served on the Board of Directors of Stifel Financial and as Executive Vice President and Head of Fixed Income Capital Markets for Stifel Nicolaus from December 2005. Mr. Sullivan has more than 30 years of industry experience, holding prior executive roles at Legg Mason Wood Walker, Dain Bosworth and Piper Jaffray.

Mr. Sullivan holds a Bachelor of Arts degree in Economics from St. John's University and is a graduate of the Securities Industry Institute at the Wharton School of Business at the University of Pennsylvania.

Mr. Sullivan is active in public service and committed to improving education, having served as a member of the Boards of Trustees for Catholic Charities, St. Ignatius Loyola Academy, Chair of the Board of Trustees of Loyola Blakefield School, and President of the Baltimore Youth Hockey Association.

Page 102 Peter Nachtwey

Chief Financial Officer

Pete Nachtwey joined Legg Mason as Chief Financial Officer and a member of the firm’s Executive Committee in January, 2011. In his role as CFO at Legg Mason, Mr. Nachtwey is responsible for Finance & Treasury, Investor Relations, Public Relations, Corporate Marketing & Corporate Communications.

Prior to joining Legg Mason, Mr. Nachtwey worked for The Carlyle Group, where he was Chief Financial Officer, a member of the Operating Committee, and responsible for the firm's financial and investor reporting, internal controls, budgeting, treasury, IT and global facilities.

Prior to joining Carlyle, Mr. Nachtwey was a partner at Deloitte & Touche, serving in various leadership roles including Northeast Regional Managing Partner for the Investment Management industry and as the firm's lead partner for the Blackstone Group. Before becoming a partner at Deloitte, Mr. Nachtwey spent two years overseas working for a U.S. defense contractor.

Mr. Nachtwey graduated magna cum laude from Syracuse University. He is active in a number of industry groups, and he is a member of the Public Company Accounting Oversight Board’s Investor Advisory Committee. Mr. Nachtwey’s community activities have included College Bound Foundation, The National Gallery of Art, The Friends of the New York Public Library, and the Tri-State Regional Plan Association.

Page 103 Thomas Hoops

Head of Business Development

Mr. Hoops joined Legg Mason as Head of Business Development and a member of the firm’s Executive Committee in January, 2014. He joined Legg Mason from Wells Fargo Asset Management, where he was Head of Affiliated Managers, with responsibility for the growth and profitability of $115 billion in assets under management across affiliated investment firms with expertise in alternative investments, quantitative strategies, and specialty asset classes.

In his role as Head of Business Development at Legg Mason, Mr. Hoops is responsible for leading the Firm’s mergers and acquisitions and global product development, working with the executive team, investment affiliates and global distribution.

Prior to joining Wells Fargo Asset Management, Mr. Hoops served as Chief Operating Officer at Evergreen Investments and Wachovia Global Asset Management based in London and Charlotte. He has also been Director of Corporate Development for Wachovia Corporation and Chief Investment Officer of Wachovia Strategic Ventures. Previously, Mr. Hoops was also Managing Director at a boutique investment bank which specialized in M&A advisory for emerging growth and middle-market companies and their owners. He began his career as a credit analyst at First Union National Bank in Charlotte.

Mr. Hoops has a B.S. in Computer Science and Economics from Duke University, a J.D. from the University of North Carolina, School of Law and an M.B.A. from the Kenan-Flagler Business School at the University of North Carolina, Chapel Hill.

Mr. Hoops also holds the Chartered Financial Analyst (CFA) designation and is a member of the North Carolina Bar Association and the Bar of the Supreme Court of the United States.

Page 104 Terence Johnson

Head of Global Distribution

Terry Johnson joined Legg Mason, Inc. in December 2005 from Citigroup Asset Management, following its acquisition by Legg Mason. In April 2013, Terry was appointed Head of Global Distribution at Legg Mason, after having served as Interim Head of Global Distribution. Terry is responsible for overseeing Legg Mason’s US and International retail distribution efforts, which includes activities related to the sale of Legg Mason and its affiliated managers’ products to intermediaries across the Americas, Europe, Asia Pacific, Japan and Australia. Prior to this, Terry headed International Distribution at Legg Mason.

At Citigroup Asset Management, Terry served as Managing Director and Head of International Private Asset Management, leading teams responsible for implementing and selling fund and managed portfolio solutions to HNW clients throughout EMEA, Asia Pacific and Latin America. Prior to joining Citigroup Asset Management in 2003, Terry worked for JP Morgan Asset Management in retail and institutional distribution positions in various areas across the US, Europe, and Asia. Terry has 20 years of global asset management distribution experience and currently resides in London, England.

Terry serves as Legg Mason’s representative on the ICI (Investment Company Institute) Global Committee. He graduated with high honors from Wesleyan University in Connecticut, where he majored in History, concentrating on Russian studies.

Page 105 Richard Genoni

Head of ETF Product Management

Rick Genoni joined Legg Mason in the spring of 2015 as Managing Director and Head of ETF Product Management.

Before joining Legg Mason, Rick held increasingly senior roles with The Vanguard Group since 1991. He was Principal and Global Head of Index and ETF Product Management and led Vanguard’s ETF efforts since 2004. He chaired the Vanguard Global ETF Advisory Board, led Vanguard’s global index and ETF product strategy, and was actively involved in setting Vanguard’s broad international strategy. From 2001-2004, he was a senior analyst in the firm’s Corporate Strategy team, analyzing new target markets and evaluating new products, partnerships and strategic opportunities.

He holds a BS from LaSalle University and an Executive MBA from Villanova University.

Page 106 Stephen J. Furnary

Chairman and Chief Executive Officer – Clarion Partners

Stephen J. Furnary is the Chairman and Chief Executive Officer of Clarion Partners and one of the firm’s founding partners. Steve is an equity owner as well as the Chairman of the Clarion Board of Directors and Executive Board and a member of the Investment Committee. He has been responsible for the firm’s strategic direction since its inception. Steve began working in the real estate industry in 1974.

Steve is a Governor and former trustee of the Urban Land Institute, former Chairman of the Pension Real Estate Association, as well as former Chairman of the National Association of Real Estate Investment Managers, and Vice President of the Muscular Dystrophy Association.

Steve holds an M.B.A. from Boston College and a B.S. from Villanova University.

Page 107 David Gilbert

President and Chief Investment Officer – Clarion Partners

David Gilbert is the President and Chief Investment Officer of Clarion Partners. He is a member of the firm’s Executive Board and Operating Committee, as well as Chairman of the Investment Committee. David is also responsible for oversight of Clarion Partners’ Investment Research Group. He joined Clarion in 2007 and began working in the real estate industry in 1983. David is on the Board of Directors of the Pension Real Estate Association and a member of the Urban Land Institute. He also currently serves on the Board of Directors of Spirit Realty Capital, a $7 billion public REIT focused on net lease investing.

David holds an M.B.A from he Wharton School, The University of Pennsylvania, M.B.A. and a B.B.A. from University of Massachusetts, B.B.A.

Page 108 Patrick Tully, Jr

Chief Financial Officer – Clarion Partners

Patrick Tully, Jr., equity owner and Managing Director, is the Chief Financial Officer of Clarion Partners. Pat is responsible for all portfolio and corporate financial activities for the firm and oversees the firm’s information technology functions. He is a member of the firm’s Executive Board and Chairman of the Operating Committee. Pat joined Clarion Partners in 1998, began working in the real estate industry in 1994, and is a former Board Member of the National Council of Real Estate Investment Fiduciaries (“NCREIF”).

Steve holds a B.S. from Rutgers University.

Page 109 Gregg S. Hymowitz

Founder and the Managing Partner – EnTrust

Gregg Hymowitz is a Founder and the Managing Partner of EnTrust since its inception in April 1997, the Chair of EnTrust’s Investment Committee and a member of EnTrust Securities LLC. Prior to the founding of EnTrust, Mr. Hymowitz was a Vice President at Goldman, Sachs & Co., which he joined in 1992. For the preceding two years, Mr. Hymowitz was an attorney in the mergers & acquisitions practice at Skadden, Arps, Slate, Meagher & Flom.

Mr. Hymowitz graduated cum laude from Harvard Law School with a Juris Doctorate in 1990, and received a B.A., Phi Beta Kappa, from the State University of New York at Binghamton in 1987. Mr. Hymowitz was the 1985 Harry S. Truman Scholar from New York, the 1987 British Hansard Society Scholar and the 2004 recipient of the Governor’s Committee on Scholastic Achievement Award. Mr. Hymowitz currently serves on the Board of Trustees of Montefiore Medical Center, the Board of Directors of JYD Project, Inc., and served two terms as a Trustee of the Riverdale Country Day School

Page 110 Omar Kodmani

Chief Executive Officer – Permal Group

Omar Kodmani was appointed Chief Executive of Permal Group in 2014, having previously been its President. Prior to this appointment, he was Senior Executive Officer, responsible for monitoring Permal's international investment activities as well as asset gathering initiatives. Mr. Kodmani is also Director of Permal Investment Management Services Limited and Permal Group Ltd.

Before joining Permal in 2000, Mr. Kodmani spent seven years with Scudder Investments in London and New York where he developed the firm's international mutual fund business. Prior to Scudder, Mr. Kodmani worked for four years at Equitable Capital (now part of Alliance Bernstein).

Mr. Kodmani is a CFA® Charterholder and serves on the Advisory Board of the CFA® (UK). He holds an M.B.A. in Finance (Beta Gamma Sigma) from New York University Stern School of Business, a B.A. in Economics from Columbia University and a G.C. Certificate from the London School of Economics.

Page 111 Daniel McCabe

Chief Executive Officer – Precidian

Mr. McCabe is recognized as an authority on ETF product design and exchange related matters and Precidian Investments is widely known as a thought leader within the dynamic ETF industry. Prior to founding Precidian Investments, Dan served as CEO of Bear Hunter Structured Products LLC, a NYSE and AMEX specialist firm. Dan has a twenty-five year background with trading and design of structured and derivative products, institutional sales and index arbitrage. He and his partners have developed and patented some of the most creative solution based ETF designs available. Dan has also testified before the U.S. House Financial Services Committee on matters regarding our national market structure.

Page 112 Carl McGann

Chief Operating Officer

Carl McGann is the Chief Operating Officer at RARE Infrastructure. Carl is responsible for the management of all non- investment and distribution-related activities. This includes risk management, compliance, legal, investment operations, finance, management of projects and general business support. Carl is also responsible for the trading team.

Prior to joining RARE in 2014, Carl was Chief Operating Officer – Investments Asia Pacific at Fidelity International (Hong Kong), which managed over USD 70 billion. In this role Carl was responsible for 115 employees in 8 locations across the Asia Pacific region. Before that, Carl oversaw the platforms, products and adviser services business unit at Zurich Financial Services, where he was responsible for the development and management of a range of products, platforms and adviser services.

Carl holds a Bachelor of Accounting and Finance from the University of New South Wales, is a chartered accountant and is a member of the Australian Institute of Company Directors.

Page 113 John Bellows

Portfolio Manager and Research Analyst

John L. Bellows, PhD, is a Portfolio Manager and Research Analyst with Western Asset. Prior to joining the Firm in 2012, Mr. Bellows served at the U.S. Department of the Treasury, most recently as the Acting Assistant Secretary for Economic Policy. At Western Asset, he is a member of the US Broad Strategy Committee and the Global Investment Strategy Committee.

Mr. Bellows holds a Bachelor of Arts degree in Economics from Dartmouth College, where he graduated Magna Cum Laude, and a PhD in Economics from the University of California, Berkeley. He also holds the Chartered Financial Analyst designation

Page 114 Michael Buchanan

Deputy Chief Investment Officer

Michael C. Buchanan, Deputy Chief Investment Officer at Western Asset, joined the Firm in 2005. He previously served as Managing Director and Head of US Credit Products at Credit Suisse Asset Management and as Executive Vice President and Portfolio Manager at Janus Capital Management. He also worked at BlackRock Financial Management as Managing Director and Portfolio Manager and at Conseco Capital Management as Vice President and Portfolio Manager.

Mr. Buchanan is significantly involved in non-for-profit work, with a specific focus on education and childhood development. He is the former Board Chair and Board Member of Foothill Family Service (www.foothillfamily.org); current Board Chair and Board Member for Mayfield Junior School (www.mayfieldjs.org); member of the Brown University Class of 1990 25th Reunion Annual Fund Gift Campaign, and Former Vice Chair and Board Member for Pacific Oaks College and Children’s School.

Mr. Buchanan holds the Chartered Financial Analyst® designation and graduated with Honors from Brown University. He holds a Bachelor’s degree in Economics.

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