Leading investment firm Legg Mason has announced a combination of Permal, its alternative fund solutions provider with EnTrust Capital, a giant independent hedge fund investor, in what financial experts say will create a powerful asset management firm with a huge financial muscle.
Headquartered in New York, EnTrust is one of the most revered fund investor with total assets of around $12 billion as well as corresponding investment strategies besides a business mix to Permal.
The merger will create a new firm and this will increase the assets that will be managed by the hedge funds-of-funds business to approximately $26 billion. Consequently, the firm will be able to offer solutions to high net worth investors and a remarkable number of institutional investors.
Following the merger, Legg Mason will remain the company with the largest portion of the new entity, owning 65% of it. EnTrust Capital will don a new name, EnTrustPermal, and will own the remaining 35% of the company. The newly-formed EnTrust Permal will become the industry’s fifth-largest hedge funds-of-funds company, according to statistics from Pensions & Investments’ annual survey.
EnTrust’s President Gregg Hymowitz will serve as the CEO and Chairman of EnTrustPermal. However, there is no change in the investment and business professionals from the two firms joining hands as the financial experts will continue serving as the investment experts of the new organization.
With an increased financial muscle, EnTrustPermal will be able to offer its global clients ability to outsource, conduct research, and increase investment opportunities to such clients. Besides, the company will enjoy global infrastructure and expertise with its professionals distributed across the world.
Other complementary dynamics of the merger is the ability to offer 18 hedge fund-of-funds investment strategies to existing and new clients who will work in tandem with the 55 investment experts distributed in 11 branches the firm has. Investors will also enjoy 150 unique investment offerings across the 18 different investment strategies EnTrustPermal is coming up with.
“This combination brings together globally-recognized companies in the alternative space and this is an impetus for Legg Mason,” said Mr. Joseph Sullivan, who is the Chief Executive Officer and current Chairperson of Legg Mason.
“With a 20% annual growth since the last financial crisis, EnTrust brings on the table an unmatched track record for steering growth in this sector, something that will benefit us.”
On his part, Managing Partner of EnTrust Gregg Hymowitz said: “We are now talking about an influential company that can take the hedge fund universe to the next level. We have the financial power to offer our products to clients across the globe and this is a major blow to our competitors.”
Permal Group CEO Omar Kodmani was bullish over the combination, saying that the combination is a step towards the future of the industry. “We are looking into the future where clients will be looking for investment solutions from a multifaceted front.
This combination will be able to pool expertise from both sides and make our business stronger,” he said.
Headquartered in New York City, EnTrust is a global alternative asset management firm whose total assets stood at approximately $12 billion as at December 2015. The firm manages over 450 institutional accounts in addition to over $4 billion in tailor-made judicious partnerships with institution-based investors.
With its headquarters in Maryland (Baltimore), Legg Mason is an international asset management firm which enjoys a vast $671.5 billion in assets under management as of December 31, 2015. It offers customized solutions in asset management across the globe.
Permal is a leading global alternative asset manager, offering investment solutions through established funds and customized portfolios. Established in 1973, the Group has four decades of experience in manager selection, asset allocation and risk management.