Asset manager Legg Mason Inc. on Thursday said the company and its alternative asset managing affiliate Permal Group have entered into definitive agreement to acquire Fauchier Partners from BNP Paribas Investment Partners, an affiliate of French lender BNP Paribas. The company did not disclose the terms of the deal.
Legg Mason expects the deal with BNP to close in the first quarter of 2013. The transaction will be accretive to Legg Mason's earnings in the first year, reflecting its ongoing commitment to create shareholder value.
Fauchier Partners, a European manager of funds of hedge funds, had approximately $6bn in assets under management as of November 30, 2012.
Following the deal, Legg Mason will combine Fauchier Partners with Permal to create an institutionally focused platform with approximately $24bn in assets under management. The combined firm will have offices in nine locations around the world, and a global investment team based in New York, London, Paris and Singapore.
According to the company, Fauchier Partners adds significant presence and capabilities to Permal's already well established US institutional business with extensive pension fund and insurance clients in Europe, as well as Asia Pacific.
The deal will open up Permal's $7bn Managed Account Platform, which provides greater investor control, transparency and customisation possibilities, to Fauchier Partners clients. It will also result in continued partnership with BNP Paribas unit, facilitating and enhancing both client service and new business development, with a global distribution agreement for Fauchier and Permal products.
Commenting on the deal, Joe Sullivan, Interim Chief Executive Officer of Legg Mason, said: "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."
