SNL Financial Provides Additional Data on Legg Mason Inc.'s Asset Swap with Citigroup Inc.

CHARLOTTESVILLE, VA. -- SNL Financial has released data tables on how the announced $3.7 billion asset swap between Legg Mason Inc. (LM) and Citigroup (C) fits into the asset manager marketplace. Legg Mason is exchanging its broker/dealer business, approximately $1.5 billion in common and convertible preferred shares and approximately $550 million in the form of a five-year loan facility for Citigroup's asset management business.

SNL Financial's Senior Analyst, Eric Fitzwater, sees the deal changing the asset manager landscape. "A top 15 player in the market is combining with a top 30 player in the market to create a company that makes its way into the top five. That by itself is going to change the competitive environment. Coupling that with the relationship Legg and Citi developed as a result of this transaction only compounds those changes. Citi is going to be certain to provide a strong marketing platform for the Legg products."

Fitzwater also sees the deal as completing a transformation of Legg Mason from a broker/dealer to a pure-play asset manager. "Six or so years ago, we classified Legg Mason as a broker/dealer. That changed about four years ago as the company began generating most of its business through asset management. Today's deal is the capstone of that transformation. It essentially rids Legg of its brokerage business and, at the same time, catapults the company into the top tier of marketplace. It's not often to see a business plan work as textbook as Legg made this one."

SNL's proforma rankings of asset managers now lists Legg Mason as number four in the U.S., with approximately $830 billion in AUM, behind State Street Global Advisors with approximately $1.40 billion, Barclays Global Investors with approximately $1.36 billion and Fidelity Investments with approximately $1.10 billion.

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