Legg Mason of Baltimore announced last week that it will acquire Private Capital Management, a high-net-worth manager in Naples, Fla. in a cash and incentive deal that could reach $1.38 billion. This is Legg Mason's third acquisition of a wealth adviser within the past six months.
PCM, with $8 billion in assets under management, will become a wholly-owned subsidiary of Legg Mason and will continue to be managed by its two principals and co-founders. PCM was established in 1985 to manage money for the Collier family and now manages money for 1,500 clients including wealthy individuals, families, endowments, foundations and several institutions.
Legg Mason will pay $682 million at closing and additional incentive payments based on PCM's growth after three and five years. Legg Mason expects to raise a portion of the purchase price in the capital markets, the company said.
Legg Mason, with close to $140 billion under management as of March 31, has acquired two other firms that manage assets for affluent investors since late last year. In December, Legg bought Barrett Associates of New York for an undisclosed amount. Barrett managed $2 billion. In March, Legg announced it would buy Perigee of Toronto in a stock swap. Perigee managed $14 billion for institutional and retail clients, and 12 no-load funds.