Legg Mason to sell investment advisory unit to Stifel Financial

Baltimore money manager Legg Mason said Wednesday that it plans to sell an investment advisory unit to Stifel Financial Corp., part of a broader effort to streamline the firm's business.

Legg Mason Investment Counsel & Trust Co, which had about $9 billion in assets under management, will become part of Stifel's global wealth management business after the deal, expected to close in the fall. Terms were not disclosed.


The move follows efforts by CEO Joseph Sullivan to reposition the company, which is working to reverse a trend of net quarterly withdrawals by customers tied to past performance problems.

It shed its international equities investment unit in August and sold back to managers its private capital management unit in July. In March it announced plans to acquire New York-based investment firm QS Investors, and integrate two of its divisions into the company. The deal was completed at the end of May.

"For Legg Mason, this transaction continues to evolve our investment affiliate lineup toward fewer and larger firms that can be better leveraged through our global distribution platform," Sullivan said in a statement.

Legg Mason's shares closed Wednesday at $50.18, up 2 percent for the day. Stifel closed at $45.62, up 1.62 percent.

In a note to investors Wednesday, Citigroup analyst William R. Katz identified "positive takeaways" for Legg Mason from the sale's announcement, writing that it could lead to greater focus and provide cash for the company to use for growth.

In a separate report, he praised Sullivan, who was placed at the helm of the company last February, for trying to simplify the business.

"LM's strategy is much more refined under new management and execution risks continue to ease," he wrote. "New management has done well to simplify the business, cull sub-performing platforms, tighten its growth strategy, and improve relationships and economic ties with selected affiliates."

St. Louis-based Stifel has been on an acquisition binge. Last month, it acquired Oriel Securities, a London-based stockbroking and investment banking firm. In January, the company also announced an agreement to acquire California-based De La Rosa & Co., a public finance investment banking boutique.

Stifel Chairman, President and CEO Ron Kruszewski called the addition of the Legg Mason unit, with offices in Baltimore, Cincinnati, New York and Philadelphia, "a perfect addition" to its wealth management business. Stifel also has an office in Baltimore.

Legg Mason had $673 billion in assets under management at the end of April.

Reuters contributed to this article.