Major mergers and acquisitions are nothing new to Wall Street and the financial world, but this past week one of the biggest firms in the world made two major announcements. Legg Mason, Inc. announced that they were acquiring EnTrust Capital and merging the company into its already existing Permal hedge fund.
Entrust Capital was a leading hedge fund and financial services firm that was able to build an investor base with over $12 billion in assets. The acquisition provided Legg Mason with the ability to acquire a unique and diversified investment set, which was going to provide a great complimentary strategy to what they were already doing with their Permal hedge fund.
By combining the two companies into one, the company will be creating one of the largest funds in the world. The resulting company will have about $26 billion in assets under management and total assets of about $29 billion, making it one of the largest and potentially most profitable funds based in New York. The ending entity will be EnTrustPermal. The company will be owned 65% by Legg Mason and 35% by Gregg Hymowitz, the original founder and CEO of EnTrust.
Going forward, the fund will continue to be run by Hymowitz, who will be the acting CEO. The overall investment strategy will be very similar to what EnTrust was doing prior to the merger. However, they will now have more assets and access to a broader range of investments, which should serve the company well. The new fund will continue to market and invest equity from institutional investors and other high net worth individuals.
The new fund will continue to help Legg Mason grow and provide attractive returns to investors. Legg Mason currently has over $650 billion in assets and is well regarded to provide exceptional asset management services to its clients. Joseph Sullivan, the CEO of Legg Mason, has gone on record stating that the new merger will give Legg Mason clients a great opportunity to yield very high investment returns. Ever since the financial crisis in 2008, EnTrust has provided its clients with annual returns on investment of around 20%, which has made it a leader in its space.