Earlier this year, money management firm Legg Mason announced several new acquisitions in an effort to further diversify its holdings in accordance with the demands of investors. These acquisitions, worth more than $1 billion, come on the heels of numerous other acquisitions spread over the last two years, and the firm continues to raise its profile.
Legg Mason, based on Baltimore, MD, has acquired a controlling share in both the New York real estate investment firm, and the New York based EnTrust Capital. It will combine the latter with its own hedge fund platform Permal to create to new firm EnTrustPermal, of which it will own 65%. The remainder will be owned by Gregg Hymowitz of EnTrust. Legg also acquired a 19.9% stake in Precidian Investments.
All three of these investments seem likely to pay off, as they all have solid earnings. Furthermore, these as well as other recent acquisitions make Legg Mason a significantly more agile proposition for investors. This will expand their affiliates from just file in the recent past to 10 now. These moves will likely help to draw investors who are skittish of the stock market in a potentially turbulent year, says finance professor Karyl Leggio of Loyola University Maryland.
Reports from the fourth quarter of 2015 show mixed results for Legg Mason, but there are many reasons to be optimistic. The majority of Legg’s affiliates showed growth, and they will be able to offer a broader range of products going forward. Leggio also added that these moves aren’t necessarily just a move to diversify, but an expansion of Legg Mason’s product line. It is a move to put more tools and options at the disposals of investors.
Prior to these big acquisitions, Legg was able to acquire RARE Infrastructure, based in Sydney Australia, Martin Currie, of Edinburgh, Scotland, and QS Investors of New York. All of these acquisitions taken together support the claim made by chairman and CEO Joseph A. Sullivan, that “For the asset management industry, evolution is not an option. It is a necessity”. All of these recent acquisitions show a desire to evolve, or at the very least change to suit an ever changing environment and the increasing demand for more options always coming from investors.