Legg Mason and Permal Announce Acquisition of Fauchier Partners
- Transaction creates global institutional platform with $24 billion in assets
under management(1) -
- Expected to be accretive to Legg Mason earnings in the first year -
BALTIMORE, Dec. 13, 2012
BALTIMORE, Dec. 13, 2012 /PRNewswire/ --Legg Mason, Inc. (NYSE: LM) and
affiliate Permal have today announced a definitive agreement to acquire
Fauchier Partners, a leading European based manager of funds of hedge funds,
from BNP Paribas Investment Partners. Fauchier Partners will be combined with
Permal, one of the largest alternative asset managers in the world, to create
an institutionally focused platform (the 'Group') with approximately $24
billion in assets under management, offices in nine locations around the
world, and a global investment team based in New York, London, Paris and
The transaction is expected to close in the first quarter of 2013 and be
accretive to Legg Mason's earnings in the first year, reflecting Legg Mason's
ongoing commitment to create shareholder value. The terms of the transaction
were not disclosed.
Permal and Fauchier Partners bring together two leading institutional
businesses, with a global investment reach and little crossover, operating in
different markets and specializing in different areas. With extensive pension
fund and insurance clients in Europe, as well as Asia Pacific, Fauchier
Partners also adds significant presence and capabilities to Permal's already
well established US institutional business.
The combined benefits of the Group include:
oMaterially deeper pool of investment talent, covering a wider range of
alternative investment strategies, with Fauchier Partners particularly
noted for equity hedged and event driven, and Permal for fixed income,
credit and macro investing.
oFormation of a global investment team with approximately 60 investment
professionals, based in New York, London, Paris and Singapore, which will
be led by Permal's Robert Kaplan and Fauchier Partners' Clark Fenton.
oContinuity of respective portfolio management teams, with the additional
benefits of broader research resources and capabilities of the Global
oOpening up Permal's $7 billion Managed Account Platform to Fauchier
Partners clients. This is currently available to Permal clients and
provides greater investor control, transparency and customisation
oLeading proprietary information systems and databases, leveraging the best
technology from both firms.
oShared processes and controls, which will allow the Group to deliver
superior services to clients.
oContinued partnership with BNP Paribas Investment Partners, facilitating
and enhancing both client service and new business development, with a
global distribution agreement for Fauchier and Permal products.
Joe Sullivan, Interim Chief Executive Officer of Legg Mason: "This transaction
significantly expands Permal's institutional business, creating a global
institutional capability across geographies and client profiles. The strength
of this combined platform will be an important driver of Permal's future
growth as clients in the alternatives sector increasingly look for providers
with size and scale. This is an important step to growing our alternatives
capabilities through Permal. This deal will be accretive to the Legg Mason
shareholder in the first year, reflecting our ongoing commitment to creating
Isaac Souede, Chief Executive Officer of Permal: "This transaction is highly
beneficial for both sets of our clients, bringing together leading
alternatives teams and further developing the Group's investment resources,
with significant investment presence in New York and London. Strategically,
Fauchier Partners meets all of our criteria, for it accelerates the
development of our institutional presence, enhances the European and Asian
business, and strengthens the Permal employee talent pool. Alongside Legg
Mason, we saw significant opportunities from this transaction to further our
joint strategic goals and worked closely to bring this to fruition."
Clark Fenton, Chief Executive Officer of Fauchier Partners: "This is a very
exciting strategic development for our business. Combining Fauchier Partners
with Permal gives our clients the best of both firms. We maintain our existing
investment process, but have the additional benefit of a much wider pool of
investment talent and resources. We get the benefits of scale, increasing our
buying power and global reach. Crucially our clients will be able to access
one of the industry's largest managed account platforms, which is of
particular relevance to our growing customised account offering."
Form 8-K Filing
Concurrently with Permal's acquisition of Fauchier Partners, Legg Mason also
announced today in a Current Report on Form 8-K filed with the Securities and
Exchange Commission that the Company has modified its employment and other
arrangements with the management of Permal Group.Legg Mason also announced
that on December 12, 2012 it concluded that it will take aggregate non-cash
impairment charges in the range of $650 million to $750 million ($460 million
to $550 million after net tax benefits) for impairment of two significant
indefinite-life fund management contract intangible assets. Additional
details are provided in the Form 8-K.
Acceleration of Payment of Quarterly Dividend Payment
On December 12, 2012, the Legg Mason Board of Directors approved an amendment
to the payment date for the Company's quarterly cash dividend on its common
stock in the amount of $0.11 per share. The dividend will now be payable on
December 28, 2012, rather than the previously announced payment date of
January 7, 2013. No changes have been made to the record date, December 12,
2012, or amount of this previously declared quarterly cash dividend. This
action reflects Legg Mason's ongoing commitment to return capital to
shareholders through dividends and share repurchases.
Legg Mason is a global asset management firm with $648 billion in assets under
management as of November 30, 2012. The Company provides active asset
management in many major investment centers throughout the world. Legg Mason
is headquartered in Baltimore, Maryland, and its common stock is listed on the
New York Stock Exchange (symbol: LM).
For more information visit: www.leggmason.com.
Permal Group is a leading global alternative asset manager, offering
investment solutions through established multimanager funds and customized
portfolios. Established in 1973, the Group has almost four decades experience
in manager selection, asset allocation and risk management. Today there are
over 200 employees, offices in London, New York, Boston, Nassau, Paris, Dubai,
Singapore, Hong Kong and Tokyo, and extensive networks of experienced managers
and relationships around the globe. Permal is a part of the Legg Mason Group
For more information visit: www.permal.com.
Fauchier Partners is one of Europe's largest providers of fund of hedge funds
and customised portfolios to the institutional investment community, and as of
November 30, 2012, had approximately $6 billion in assets under management.
Established in 1994, it has a long term record of providing strong, stable
returns. Fauchier Partners is based in London, New York, Paris and
Guernsey. For more information visit: www.fauchierpartners.com.
BNP Paribas Investment Partners
BNP Paribas Investment Partners is the dedicated autonomous asset management
business of the BNP Paribas Group. BNP Paribas Investment Partners offers the
full range of investment management services to both institutional and retail
clients around the world. Central to the way we work is the concept of
partnership – both in terms of how we behave as a family of companies and our
relationships with our clients. Around 800 investment professionals work
across our network of some 60 investment centres, each specialising in a
particular asset class or type of product. With total assets under management
of EUR 502 billion*, BNP Paribas Investment Partners is the 6th-largest asset
manager in Europe*.
For more information visit: www.bnpparibas-ip.com.
* Source: BNPP IP, 30 September 2012
This release contains forward-looking statements subject to risks,
uncertainties and other factors that may cause actual results to differ
materially. For a discussion of these risks and uncertainties, see "Risk
Factors" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in Legg Mason's Annual Report on Form 10-K for the
fiscal year ended March 31, 2012 and in the Company's quarterly reports on
SOURCE Legg Mason, Inc.
Contact: Legg Mason - Media - Mary Athridge, +1-212-805-6035, Investors - Alan
Magleby, +1-410-454-5246; Permal - Media - Alastair Crabbe, +44-20-7389-1375;
Fauchier - Media - Michael Sandler or Hudson Sandler, +44-20-7796-4133
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