Legg Mason Acquiring Clarion Partners

Global asset manager Legg Mason Inc. announced that it has agreed to acquire a majority interest in Clarion Partners, the New York-based real estate firm that manages approximately $40 billion across the real estate risk/return spectrum. Under the terms of the deal, Legg Mason will acquire an 83% ownership stake in Clarion Partners for $585 million, and pay for its portion of certain co-investments on a dollar for dollar basis, estimated at $16 million. Clarion Partners was represented by Morgan Stanley, King & Spalding and Davis Polk & Wardwell LLP, and advised by Grail Partners. RBC Capital Markets and Azrack & Co. served as financial advisors to Legg Mason.

"Clarion Partners, with a focus on strong performance through market cycles, a positive growth profile and differentiated product offerings, brings an important alternative asset class to our portfolio of investment managers. Whether they seek growth, capital preservation or income, we are further able to offer our clients investments with attractive solutions. Most importantly, the experienced management team at Clarion Partners shares our passion for innovation, the creation of exceptional value through responsible investing principles and focus on excellence for clients. We welcome them to Legg Mason," said Joe Sullivan, Chairman and CEO of Legg Mason.

Clarion's previous majority partner, private equity firm Lightyear Capital, will sell its entire ownership stake in the transaction. Lightyear will continue to be "very active in the asset management space," said Mark Vassallo, managing partner of Lightyear Capital. Clarion will join Legg Mason as one of its independent investment management affiliates, and the management team (a significant number of which have signed long term contracts in conjunction with the transaction) will retain 17% of the outstanding equity in Clarion Partners. The deal is expected to close in the second quarter of 2016.

For more news and information visit Blumberg Partners.

CBRE Buying ING Real Estate for $940M

CB Richard Ellis Group, Inc. and ING announced this week that CBRE would be acquiring most of the real estate investment management business of ING Group NV for $940 million in cash according to a Boomberg report. The acquisitions include substantially all of the ING Real Estate Investment Management (ING REIM) operations in Europe and Asia, as well as Clarion Real Estate Securities (CRES), its U.S.-based global real estate listed securities business. CBRE will also acquire approximately $55 million of CRES co-investments from ING and potentially interests in other funds managed by ING REIM Europe and ING REIM Asia.

"ING REIM, when combined with our existing Global Investment Management operations, will provide us with a significantly enhanced ability to meet the needs of institutional investors across global markets with a full spectrum of investment programs and strategies," said Brett White, CB Richard Ellis’ chief executive officer. "Our firms fit together well and our investment program offerings are highly complementary. The combined enterprise will further diversify our revenue sources and as the global market leader, we will redefine success in real estate investment management."

In a separate transaction, ING has agreed to sell the private market real estate investment manager of its US operations, Clarion Partners, to Clarion Partners management in partnership with Lightyear Capital LLC for $100 million.

"We are pleased to have found in CB Richard Ellis, and Clarion Partners management together with Lightyear, dedicated and solid partners to build on the leading positions of these REIM businesses and ensure continuity of investment teams in managing client assets in their best interests," said William Connelly, CEO of ING Commercial Banking.

For more news and information visit Blumberg Capital Partners.