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Legg Mason to buy international equity specialist Martin Currie

Legg Mason Inc. announced Thursday it would buy Martin Currie, an international equity firm based in Scotland, to increase its global reach — the latest in a line of acquisitions to improve its investment lineup.

The deal for Martin Currie, which has about $9.8 billion in assets, is expected to close in the fourth quarter, Legg Mason said in a statement. The Edinburgh-based firm would operate separately from Legg Mason, which has a number of such independent affiliates.

Legg Mason also will fold its Australian Equities unit, with $2.5 billion in assets and 14 employees, into Martin Currie.

Terms of the deal were not disclosed, but Legg Mason said it is expected to add slightly to earnings in the first year.

Martin Currie fills a void in international investment for Legg Mason, said Joseph A. Sullivan, Legg's president and CEO, at a time when U.S. investors are looking more and more overseas to profit from the global economy.

"You want to have a portfolio that, instead of trying to simply put all your chips in the U.S. bucket, you want to spread those chips around a little bit and be able to benefit from economic activity around the world, as it is different in different regions," said Sullivan, adding that a 2014 Legg Mason global investment study found investors' willingness to invest in both fixed-income and equity outside of their native county at an all-time high.

After years of subsidiary sales and yearly net withdrawals of client funds, Legg Mason entered the buyer's market last year with the $80 million purchase of Fauchier Partners, a European hedge fund investment firm, that added about $5 billion of investments to its Permal subsidiary. Legg Mason also announced in March the acquisition of New York-based QS Investors.

This spring, Legg Mason reported a reversal of a six-year trend in client cash flowing out, as clients added more than $8 billion to their accounts during the fiscal year ended March 31.

Sullivan ruled out the possibility of Legg Mason making any "major" acquisitions in the immediate future, saying the company favors fewer, but larger affiliates to avoid competition between its partners. Areas Legg Mason is looking to expand into include alternative investments such as real estate, infrastructure, energy and private equity, he said.

"If you start to look at what Legg Mason looks like from an affiliate standpoint today compared to what it looked like two to three years ago, it's totally different," he said. "It really does reflect client demand and what we can leverage through global distribution."

Legg Mason's shares closed up 1.2 percent Thursday at $51.25 each.

Reuters contributed to this article.

mbodley@baltsun.com

twitter.com/michael_bodley

Copyright © 2014, The Baltimore Sun
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