subscribe: Posts | Comments

Legg Mason and EnTrust Capital Merge To Create The Biggest Global Asset Manager

Comments Off on Legg Mason and EnTrust Capital Merge To Create The Biggest Global Asset Manager

Legg Mason Inc. has announced a new addition in their expanding lineup. The company plans to merge its hedge-fund business, Permal group with EnTrust Capital, an alternative asset management firm based in New York. The merger is aimed at boosting both companies’ prospects in alternative investments market.

The new affiliate, valued at $26 in pro-forma AUM and $29 billion in total assets, will be one of the biggest global alternative asset managers in the industry. It will be called EnTrustPermal, with 65% shares belonging to Legg Mason and the rest to Mr. Hymowitz. Hymowitz will be the new chairman and CEO of EnTrustPermal.

The merger was spearheaded by Joseph Sullivan, chief executive officer of Legg Mason since October 2013. In a slew of mergers and acquisitions, Sullivan has been instrumental in leading the company towards change. Analysts observed that Sullivan’s strategy seems to be to maximize assets and acquire capabilities in the areas of their clients’ changing preferences. This move is also aimed at reducing volatility of earnings and diversifying revenue resources to win the trust of their shareholders.

Legg Mason is a Baltimore based global asset management firm with assets worth $671.5 billion. It provides management services throughout the world, and its stock is listed with the symbol LM on the New York Stock Exchange. EnTrust Capital, founded by Gregg Hymowitz, is an alternative asset management firm and one of the top independent hedge fund investors based in New York. EnTrust is valued at $12 billion in total assets, investor base and complementary investment strategies.

This merger has provided the new affiliate with a huge scale and platform to eye leadership position in the worldwide alternative investment market. The wide range of investment capabilities of EnTrustPermal include:

  • A combined team of over 55, comprising business and investment professionals from both firms;
  • A diverse range in investment product offerings across 18 different strategies;
  • The international client and investor base of both firms combined for a much larger investment platform;
  • Bigger scope of launching innovative products and lines of business, like private debt offerings and direct hedge funds; and
  • Increased resources of revenue as well as opportunities for proprietary investment.

The merger is expected to close around mid-2016, with Morgan Stanley & Co. LLC acting as Legg Mason’s financial advisors and Goldman Sachs as EnTrust’s advisors. Analysts worldwide have also viewed this move favorably, calling it the future of the hedge fund industry with one of the best investment teams.