Legg Mason adds global equity specialist

Legg plans to work with UK-based institutional investor to develop retail funds
MAY 17, 2014
By  Bloomberg
Legg Mason Inc. said Thursday it will acquire Martin Currie Investment Management Ltd., an international equity specialist that specializes in institutional clients, and work with the firm to develop new products for advisers and retail clients in the United States. Edinburgh, Scotland-based Martin Currie has offices in six locations and $9.8 billion in client assets. The acquisition will expand Legg Mason's product capabilities in equity strategies including absolute return, and Asian and European equities, as well as global emerging markets. Specialty stock funds — like those managing international stocks — are among the fastest-growing and highest-profit-margin categories in the asset management business. They grew by 11% annually between 2008 and 2013 to $17 trillion in global assets under management, according to the Boston Consulting Group. But during the same period, traditional core actively managed products such as domestic large-cap equity, money markets and government debt — Legg Mason's largest products — have lost market, moving to 45%, from 56% of the market. “Martin Currie's active international equity capabilities fill our largest product gap and are a perfect complement to our existing investment capabilities,” Joe Sullivan, president and chief executive of Legg Mason, said in a statement. The deal is scheduled to close later this year and is expected to add to Legg Mason's earnings marginally in the first year. Baltimore-based Legg Mason reports its quarterly earnings next Thursday. The firm's affiliated managers — ClearBridge Investments, Royce & Associates and Western Asset Management — manage more than $700 billion together, with about $125 billion in mutual funds. Legg won $28 billion in new investor money last year. “We believe Legg Mason is the ideal strategic partner to grow our business further and will position us as the strategic international equities specialist in one of the most powerful independent investment management groups globally,” Willie Watt, chief executive of Martin Currie, said in a statement. Legg Mason Australian Equities with $2.5 billion under management will also become part of Martin Currie as part of the transaction. “What we will do post-transaction is work with them to launch '40 Act funds and other retail products, utilizing their institutional track records,” said Mary K. Athridge, a Legg Mason spokeswoman. Legg acquired QS Investors, a quantitative-oriented investment firm, earlier this year. The firm said it hopes more customized investment solutions from managers like QS will allow it to compete for institutional mandates while supplementing the products available to retail investors. More customized products, including absolute return, asset allocation, and income-oriented strategies, are also growing fast. They added 17% in assets annually between 2008 and 2013, according to BCG, a consultancy. Trevor Hunnicutt contributed to this story.

Latest News

Advisor moves: RBC swipes $1.7B UBS team, Baird duo departs for LPL's Linsco channel
Advisor moves: RBC swipes $1.7B UBS team, Baird duo departs for LPL's Linsco channel

RBC Wealth Management's latest move in New York adds an elite eight-member team to its recently opened Westchester office.

Stifel star broker, Chuck Roberts, leaves firm under cloud of investor complaints
Stifel star broker, Chuck Roberts, leaves firm under cloud of investor complaints

Stifel – so far - is on the hook for more than $166 million in damages, legal fees and settlements in investor complaints involving Roberts, a 35-year industry veteran.

iCapital secures $820M in latest funding, hits $7.5B
iCapital secures $820M in latest funding, hits $7.5B

The giant alt investments platform's latest financing led by T. Rowe Price and SurgoCap Partners, along with State Street, UBS, and BNY, will fuel additional growth on multiple fronts.

Merrill Lynch on the hook for $3.7M after clients claimed sale of unsuitable private equity
Merrill Lynch on the hook for $3.7M after clients claimed sale of unsuitable private equity

Some investors recently have seen million dollar plus decisions by FINRA arbitration panels involving complex products decisions go their way.

What does it take to feel 'financially comfortable' or 'wealthy' in 2025?
What does it take to feel 'financially comfortable' or 'wealthy' in 2025?

New report shines a light on how Americans view wealth today.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.