American asset manager Legg Mason has agreed to acquire a 75% stake in Australian infrastructure investing firm RARE Infrastructure for nearly A$200m.
Under the terms of the deal, RARE’s management team will retain a 15% equity stake and The Treasury Group, a shareholder of RARE, will hold 10%.
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Subject to a number of conditions including regulatory approvals, the transaction is expected to close in the fourth quarter of 2015.
Following the deal, RARE will become a core independent investment affiliate along with Brandywine Global, ClearBridge Investments, Martin Currie, the Permal Group, QS Investors, Royce and Associates, and Western Asset Management.
The acquisition is expected to strengthen Legg Mason’s offerings in equity liquid alternative investments and further develop the business, particularly in US and European markets.
RARE, which has offices in Sydney, Melbourne, London and Chicago, manages $7.6bn for institutional and retail clients.
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By GlobalDataLegg Mason chairman and CEO Joseph Sullivan said: "We believe that global demand for these liquid, long-dated assets will continue to grow and that we can leverage RARE’s existing geographic presence into additional important markets that Legg Mason’s global distribution platform serves in the US, Asia and Europe. This is an important investment capability addition for our clients and we welcome the RARE team to Legg Mason."
RARE founder and co-CEO Richard Elmslie said "Their affiliate model allows management to run the business independently with governance and oversight from the board. This partnership provides continuity and sustainability for our clients with no change to the investment team or process."
RARE founder and co-CEO Nick Langley said "For our staff and business, this provides a number of opportunities including for enhanced career progression, equity participation in the business, and access to a deep, well -resourced support team."
