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Legg Mason in talks to buy Clarion

The Baltimore-based global asset manager is reportedly the exclusive bidder for the New York-based real estate investment manager.

Legg Mason is reportedly in discussions to acquire a majority stake in Clarion Partners. The deal, which is expected to be announced as early as this month, would value the New York-based real estate investment manager at approximately $850 million.

The Baltimore-based global asset manager would buy an 80 percent interest in Clarion from current majority owner, New York-based private equity firm Lightyear Capital. Clarion’s senior management, including founder and chairman Stephen Furnary, would retain the remaining stake.

Lightyear bought a 75 percent interest in Clarion from Dutch financial services company ING Group in June 2011 in an approximately $100 million deal. Clarion’s management, which spun out of ING at the time, acquired the other 25 percent.

PERE reported in November that Lightyear was looking to sell its stake in Clarion, and that the investment banking arm of Morgan Stanley was is believed to be involved in the sale. Guy Metcalfe, chairman of real estate banking at the bank was understood to be leading a process to determine potential bidders.

Bloomberg reported yesterday that Legg Mason was in exclusive talks to become the majority owner of Clarion, and that it had pre-empted an auction process to buy the company.

Clarion currently has $38 billion of assets under management and invests across the office, retail, industrial, multifamily residential and hotel sectors in the US, Latin America and Europe. Legg Mason has $691.4 billion of assets under management in the fixed income, equity, liquidity and alternative asset classes, but does not currently have a real estate investment management arm.

Clarion, Legg Mason and Lightyear declined to comment.