The mutual fund industry has been caught in such a consolidation spree that the acquisition of Baltimore’s venerable Legg Mason was probably inevitable. Still, the announcement Tuesday by Franklin Resources, Inc. that it is acquiring Legg for a $4.5 billion cash deal was a sad day for many in Charm City. Not all, of course: Shareholders will be getting a nice payday. But the loss of another corporate headquarters is something of a body blow for the rest of us, especially for those who looked to Legg as a source of pride — a remnant of the city’s once-flourishing financial industry with roots more than a century old.
Legg was once a Fortune 500 company itself, and its executives populated the boards of many city arts, education and charitable enterprises. They have been leaders in the business community. Some, perhaps even most of the 250 jobs downtown, will stay but does anyone believe California-based Franklin will be looking to expand its Baltimore presence?
Yet as regrettable as this departure might be, it shouldn’t be regarded as a calamity. After all, companies come and go. Corporations rise and fall. Legg Mason as its known today didn’t really come to fruition until 1970 when Legg & Co. joined with Mason & Co., going public just 13 years later for a mere $14 million. This is how capitalism works. The acquisition of Legg Mason was itself a response to competition in the asset management world and the need to “get big” to compete with rivals like BlackRock, Vanguard and Fidelity.
No, the most worrisome thing about the loss of a corporate giant like Legg Mason to Baltimore isn’t its departure, it’s the sneaking suspicion that Baltimore will not see its like again. Who will be the next Legg Mason? Who will step forward to create another Baltimore-based corporation with a national and international presence? Who will bet its fortunes on an enterprise centered on the banks of the Patapsco?
Baltimore needs employers of all shapes and sizes, of course. But there are few things that boost a city’s image — and its economy — quite like a prosperous world headquarters. That’s what the mad national chase for Amazon’s second headquarters was all about. The expansion of Under Armour to Port Covington several years ago was welcome, but given the loss of so many other public company headquarters from Alex Brown & Sons to Constellation Energy, it seems an outlier. Where is the next such employer? There appears to be no one waiting in the wings.
That raises the obvious question: Are we doing enough to nurture the next Legg Mason? Gov. Larry Hogan insists that Maryland, and presumably Baltimore included, is “open for business.” But the “business climate” is more than just vowing to fight taxes or pushing mandatory minimum sentences against violent offenders. Past governors have invested in expanded public transit, in professional sports stadiums, in the port and in public education, in Inner Harbor redevelopment and on and on. Mr. Hogan’s legacy to date in Baltimore is mostly about denying the city public funding whether it’s the Red Line light rail project, the renovation of State Center or, most recently, his refusal to get on board the proposed Kirwan Commission investments in K-12 instruction.
Baltimore needs to reduce its violent crime. But to the extent that crime is a symptom of broader problems, including unemployment, drug addiction and trauma, concentrated poverty and a lack of opportunity, it needs more than a few more laws on the books. It needs elected officials in Annapolis and Washington, D.C., willing to lend a hand. Given Baltimore’s long list of challenges, the seed of the next Legg Mason won’t grow without some greater nurturing from those in a position to help.