Legg Mason to buy QS Investors
07 March 2014
Category: News, Global, USA
By Asia Asset Management
Legg Mason has announced a deal to acquire QS Investors, a customised solutions and global quantitative equities provider based in New York, with US$4.1 billion in assets under management and nearly $100 billion in assets under advisory.
Legg Mason’s existing quantitative equity platform, Batterymarch Financial Management, and Legg Mason Global Asset Allocation (LMGAA), its existing solutions platform, will be integrated over time into QS Investors as a result of this transaction. The combined platform will provide retail and institutional solutions and create a global quantitative equity provider with compelling investment strategies and strong consultant relationships.
The expanded platform will be branded under the QS Investors name, and headed by Janet Campagna as chief executive officer and Rosemary Macedo as chief investment officer. Key investment professionals from Batterymarch and LMGAA will join the existing QS team as senior members.
The acquisition is expected to close in the first fiscal quarter of FY 2015. The acquisition and combination transaction is expected, excluding restructuring and transition costs, to be modestly accretive to Legg Mason’s earnings in the first year. In connection with the combination of the businesses, Legg Mason expects to incur restructuring and transition costs of approximately $35 million, including $3 million in the March 2014 quarter and $30 million in fiscal year 2015. Terms of the transaction were not disclosed.
Joseph A Sullivan, president and CEO of Legg Mason, said: “Optimising and expanding our portfolio of investment products has been a top priority for our senior management team. The combination of QS Investors’ highly regarded investment capabilities and thought leadership with our existing investment teams creates a powerful offering in an area of the market that is expected to experience significant growth in the coming decade. When we marry that with our global distribution platform, we believe we will be well positioned to bring compelling products to retail and institutional investors in markets around the world. “
Janet Campagna, CEO of QS Investors, added: “QS Investors and Legg Mason share a “client first” culture committed to transparency that will allow us to focus on investment strategies and serving our clients, and this unique combination will allow us to leverage Legg Mason’s global retail distribution platform, build and further strengthen our talented research and portfolio management teams, and continue to be at the forefront of innovative product development. Our objective over the next year is to integrate Batterymarch and LMGAA with our platform to leverage the best ideas from each group, much like we’ve successfully adapted and efficiently integrated ideas both within and across asset classes for clients for over 14 years. We are confident in our ability to execute against this plan and especially pleased that our entire team continues to be focused on the long-term success of our clients and business.”