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Legg Mason to Axe 62 Jobs

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Legg Mason Inc. (LM - Free Report) is set to eliminate 62 employees from its Batterymarch Financial Management unit owing to its ongoing integration with New York based private asset manager – QS Investors. However, the company will retain around 12 employees from the unit to serve QS Investors.

Legg Mason has forwarded a written intimation to the state of Massachusetts under Worker Adjustment and Retraining Notification (:WARN) Act. The proposed layoffs that will take place from Jul 2014 are expected to be completed in six months.

As per the deal, which is expected to close by fiscal first-quarter 2015 (ending Jun 2014), Legg Mason’s quantitative equity division – Batterymarch Financial Management – and its solutions unit – Legg Mason Global Asset Allocation – will gradually merge with QS Investors. The merged entity that will be recognized under the QS Investors name will serve institutional as well as retail clients.

Legg Mason will assume QS Investors’ assets under management and assets under advisory worth $4.1 billion and $100 billion, respectively. The company will shell out around $41 million as purchase price while it will bear restructuring costs of around $35 million. Excluding such costs, the company expects the acquisition to be accretive to 2015 earnings.

Legg Mason currently holds a Zacks Rank #3 (Hold). Affiliated Managers Group Inc. (AMG - Free Report) , Cohen & Steers Inc. (CNS - Free Report) and Woori Finance Holdings Co., Ltd. (WF - Free Report) are  better-ranked stocks in the investment management space. All these stocks carry a Zacks Rank #1 (Strong Buy).

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