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LM - Merger Of Active Asset Managers Looks Too Passive
Legg Mason Inc.
By Breakingviews
Something is better than nothing. The over $12 billion asset manager Franklin Resources (BEN) - also known as Franklin Templeton - said on Tuesday that it plans to acquire smaller rival Legg Mason (LM) for $4.5 billion. A deal is better than the status quo, with low-fee passive managers putting heavy pressure on margins in the active-management industry. But it's mostly a defensive play.
Both firms need a boost. Franklin Templeton's assets under management declined by about 10% from 2015 to 2019, and operating margins slipped to 27% in 2019 from over 38%