By Hedge Fund Insight staff
Yesterday’s release of the 10-Q filing of Legg Mason, parent of fund-of- funds group Permal, contained an update on the parent’s expectations of growth at the hedge fund subsidiary. Expectations have been lowered, leaving the carrying value of the business at less than half of that previously held in LM’s books.
This is an extract from the 10-Q:
As a result of the new (no) growth expectations the book value of Permal in the accounts of Legg Mason, as far as Indefinite-Life Intangible Assets are concerned, has been reduced from $698m to $335m – a loss of value of $364m.
On the 22nd January this year Legg Mason announced that it has agreed to merge its Permal hedge fund platform with alternative asset manager EnTrust. Joseph Sullivan, chairman and CEO of Legg Mason, said at the time “The combined EnTrustPermal brings together two leading names in the alternative space, creating a significant potential growth engine for Legg Mason.” Given the change to expectations for growth at Permal in the 10-Q the significant potential growth must be down to EnTrust.