Legg Mason buys Martin Currie to bolster equity strategies

29 July 2014   Category: News, Australia, China, Global, Japan, Europe, United Kingdom, Asia Pacific   By Derek Au

US-based asset manager Legg Mason, which has AUM of US$704 billion, will acquire UK-based equity manager Martin Currie for an undisclosed fee.

According to a statement, the transaction, which is scheduled to close in the last quarter of this year, will help Legg Mason expand product capabilities in active equity strategies including global equity, emerging markets, Asian equity, European equity and strategies focussed on Japan and China.

Martin Currie will become an independent investment affiliate of Legg Mason, alongside Brandywine Global, ClearBridge Investments, The Permal Group, QS Investors, Royce & Associates and Western Asset Management. The deal is expected to be “slightly accretive” to Legg Mason’s earnings in the first year.

Under the transaction, Legg Mason Australian Equities (LMAE), which has AUM of $2.5 billion, will become part of Martin Currie, a move which is consistent with Legg Mason’s strategy to create fewer and larger investment affiliates. LMAE is an active equities manager, offering strategies such as small cap, property, income and large cap value.

Commenting on the transaction, Joe Sullivan, president and chief executive officer of Legg Mason, said: “Martin Currie’s active international equity capabilities fill our largest product gap and are a perfect complement to our existing investment capabilities. The Martin Currie management team shares our passion for innovation, our commitment to delivering compelling investment results and our singular focus on the needs of our clients.” He also believes Martin Currie is a “perfect strategic fit” for the Australian equity business of his firm.

Willie Watt, chief executive of Martin Currie, added: “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 companies globally. Most importantly for our clients, the partnership gives us investment and operational autonomy, and this means our client proposition remains unchanged.”

Legg Mason has been active in acquisitions since last year, when it completed a deal to buy Fauchier Partners, a Europe-based manager of funds of hedge funds in March. The firm also announced the acquisition of New York-based investment firm QS Investors a year later.