(By Balaseshan) Legg Mason Inc. (NYSE: LM) and affiliate Permal have agreed to buy Europe-based manager of funds of hedge funds, Fauchier Partners, from BNP Paribas Investment Partners for undisclosed sum.
The transaction is expected to be accretive to Legg Mason's earnings in the first year, reflecting Legg Mason's ongoing commitment to create shareholder value.
Fauchier Partners will be combined with Permal, an alternative asset manager, to create an institutionally focused platform (Group) with about $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 Singapore.
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 U.S. institutional business.
"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," said Joe Sullivan, Interim Chief Executive of Legg Mason.
Concurrently with Permal's acquisition of Fauchier Partners, Legg Mason also said in a Form 8-K filing that it has modified its employment and other arrangements with the management of Permal Group.
Legg Mason also said on December 12 it concluded that it will take aggregate non-cash impairment charges 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.
On December 12, the Legg Mason Board of Directors approved an amendment to the payment date for the company's quarterly cash dividend on its common stock 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 of December 12.
LM closed Wednesday's regular session down 1.20% at $25.45. The stock has been trading between $22.36 and $29.49 for the past 52 weeks.