Breaking News: Legg Mason Buys Clarion Partners

After months of rumors, Legg Mason confirmed that it will acquire majority ownership of Clarion Partners from Lightyear Capital.

By Samantha Goldberg, Associate Editor

Joseph Sullivan, Chairman & CEO, Legg Mason

It looks like the rumors were true—Legg Mason is buying Clarion Partners. Legg Mason and Lightyear Capital announced that they’ve arranged a deal for Legg Mason to take an 83 percent majority stake in Clarion Partners for a cool $585 million. Clarion management will retain the remaining 17 percent stake and act as the primary independent real estate investment affiliate for Legg Mason. Lightyear, the previous majority partner, will sell its entire ownership stake. The deal is expected to close in the second quarter.

As CPE previously reported, Legg Mason has been looking for acquisitions in recent months, with the company’s CEO, Joseph Sullivan, announcing at the July 2015 annual stockholders’ meeting that its M&A pipeline was robust. This deal has been in the works for the past several months and now has finally come to fruition. As part of the deal, Legg Mason will pay for its portion of certain co-investments on a dollar-for-dollar basis, which is estimated at $16 million as of Dec. 31, 2015. Additionally, Steve Furnary, chairman & CEO of Clarion, will continue in his current role.

The acquisition marks a significant expansion of Legg Mason’s offerings in the alternative asset management category, adding differentiated real estate capabilities like core and core-plus portfolios.

Stay tuned to CPE for more in-depth coverage of this deal as more details come to light.