Company Overview

Legg Mason, which has roots going back to 1899, is known for its work in three primary areas of business: investment advisory services, securities brokerage, and capital markets. However, in major news in June 2005, the firm changed direction by agreeing to a deal worth $3.7 billion with Citigroup. The deal gives Legg Mason almost all of Citi’s asset management business, which manages some $460 billion. In exchange, Legg Mason is handing over its brokerage business, with 1,542 financial advisors, plus some $1.5 billion in Legg Mason stock. The deal makes Legg Mason a major player in asset management (number five in the United States) and mutual funds management (number five in the United States), with a total of more than $830 billion in assets under management. In addition, the deal gives Legg Mason a vastly expanded distribution network for its funds, since Citigroup’s bankers and newly enlarged network of brokers will distribute the funds. In 2006, Legg Mason changed the name of Citigroup’s Asset Management US Equity Group to Clearbridge Advisors.

A smaller firm than many of its industry rivals, Legg Mason fared well in the economic slowdown of the early 2000s by cutting costs and keeping a narrow focus. It hopes that its newly narrowed focus brings it even greater success. After all, focusing narrowly on things it does well has already paid off for the firm in other areas. Legg Mason’s research group is much lauded, largely because it sticks to five core industries: real estate, life sciences, media and technology, education, and financial services.