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Franklin Buys Legg Mason in an Effort to Survive Passive Era

  • Nearly $4.5 billion deal unites traditional active managers
  • The tie-up would create a firm with $1.5 trillion in assets
Bloomberg business news
Bloomberg’s Sonali Basak reports on why Franklin Resources and Legg Mason are becoming one company.(Source: Bloomberg)
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Franklin Resources Inc. and Legg Mason Inc. helped pioneer asset management in the 20th century. On Tuesday, the venerable but fading names said they will combine in an effort to compete, as low-cost index funds upend their industry.

In an era when traditional stock-pickers are under intensifying pressure, San Mateo, California-based Franklin agreed to buy Legg Mason to create a firm with a combined $1.5 trillion in assets.