Legg Mason completed its acquisition of hedge fund-of-funds heavyweight Permal Group, said spokeswoman Alison Mackley. Legg Mason acquired an 80% interest in Permal from Sequana Capital and Permal's management, and will have the right to purchase the remaining 20% over the next four years, according to a news release. Legg Mason paid $600 million of the $800 million price tag in cash and the remainder in the form of Legg Mason common stock. Permal, with $19.3 billion in assets under management, will operate as a separate business within Legg Mason Wealth Management. The entire Permal management team will remain with the company under long-term employment agreements.
Permal's assets exclude $3.2 billion managed by Haussmann Holdings, according to a footnote to the Legg announcement. Permal decided to leave the management of Haussmann as of Dec. 31, said a separate news release. Permal Group Chairman and CEO Isaac Souede said in the release that Haussmann was the only hedge fund-of-fund product in the Permal lineup managed as a consortium with three Swiss private banks. Haussmann Holdings' recent decision to move from its U.S. focus to a more global focus, similar to that of Permal's flagship Permal Investment Holdings fund, threatened "confusion in the marketplace," according to the release.
Spokesmen for Permal, who declined to be named, said the Haussmann situation was known in June when Legg announced the Permal purchase and had no impact on the deal. One spokesman noted that Permal's margins on the Haussmann assets were "very small compared to the rest of our business."
HH Management, a new management group for Haussmann Holdings, will manage its assets as of Dec. 31, advised by Notz, Stucki & Cie, Mirabaud & Cie and Banca del Ceresio.