The recent agreement to acquire 75% of Australian investment house RARE Infrastructure follows last year's purchase of Scottish-based Martin Currie and before that, US-based fund managers QS Investors and Fauchier Partners (now part of Permal). That brings the multi-affiliate tally to seven, and if the RARE deal goes ahead as expected, Legg Mason will house eight independent fund managers.
Legg Mason affiliated fund managers include Brandywine, Clearbridge, Martin Currie, Permal, QS Investors, Royce & Associates and Western Asset. Both Martin Currie and Western Asset have investment teams located in Australia, along with a Legg Mason distribution office. RARE has its own retail distribution client facing team in Australia.
Among the world’s top 30 fund managers, multi affiliate models are few and far between. The largest asset managers tend to be single brand entities, typically with an overarching investment style.
Contrast that with Legg Mason, which does not have a single house view on financial markets, economic opinion or investment style: instead those central roles are bestowed to the individual affiliates. The ability to maintain an independent investment identity is no doubt one of the biggest draw cards for fund managers choosing to join the Legg Mason stable.
So how does a multi affiliate model benefit investing clients?
The first part of this answer relates more to what the affiliate model is not. It’s a ‘pure play’ asset management business that is 100% focused on investing for clients, and supporting that charter. There’s no financial planning, investment banking nor platforms in the business mix. In contrast, the leading asset managers in Australia tend to have diversified business models that include investing, but are not exclusively about investing.
The second key benefit is that clients who are seeking fewer but deeper relationships with service providers can access a range of independent fund managers through the one Legg Mason relationship. That often results in building bespoke solutions such as dynamic value, US bank loans or even specific currency denominations. Legg Mason works with its affiliates in a one-firm mindset – clients can have confidence it’s not a short-term alliance that can be terminated after a set number of years.
It's been a decade since Legg Mason first landed on Australia's shores through a transaction with Citigroup, which in turn, has a history locally that dates back to 1954.
In Australia there are 20 registered funds that access the affiliate strategies across key asset classes. There has been increasing interest from dealer groups in several Legg Mason strategies, including: Real Income, Equity Income and Multi Asset Income (managed by Martin Currie Australia); Australian Bond and Macro Opportunities (Western Asset); and Global Opportunistic Fixed Income (Brandywine). The Diversified Trust is also receiving adviser attention with the multi-sector fund investing in a range of affiliate strategies. All above strategies are available as mFunds, with the exception of Macro Opportunities.
After bringing retirement income solutions to market over the past 5 years, the firm is looking to launch a range of new strategies from its affiliates, including alternatives manager Permal and active equities specialist Martin Currie.
In May 2015 Legg Mason was awarded Australian Fund Manager of the Year at the Lonsec/Money Management Awards. With $30 billion in funds under management, Legg Mason Australia Head Annalisa Clark attributed its win to having highly regarded investment capabilities, consistent brand awareness and industry participation.
For further information on Legg Mason, visit www.leggmason.com.au or freecall 1800 679 541.
Any reference to “Legg Mason Australia” is a reference to Legg Mason Asset Management Australia Limited ABN 76 004 835 849 AFSL 240827. Neither Legg Mason Australia, nor any of its related parties, guarantee the repayment of capital or performance of any of the trusts referred to in this document. Past performance is no guarantee of future performance. Applications to invest in any Legg Mason Trust can be made using an application form comprising part of the current Product Disclosure Statement, which is available from our offices or on our website at www.leggmason.com.au. Certain eligibility criteria applies. Legg Mason Australia does not guarantee the accuracy or completeness of this document. To the extent permissible by law, Legg Mason Australia accepts no liability in contract, tort (including negligence) or otherwise for any loss or damage suffered as a result of reliance on this document. This document does not constitute investment advice, and has not been prepared to take into account the investment objectives, financial objectives or particular needs of any particular person. Before making an investment decision you should read the Product Disclosure Statement carefully and you need to consider, with or without the assistance of a financial advisor, whether such an investment is appropriate in light of your particular investment needs, objectives and financial circumstances.