Legg Mason is buying a chunk of high net worth assets from Deutsche Bank, the two firms announced Monday morning. The deal involves the Scudder Private Investment Counsel business that the German bank acquired when it purchased Scudder Investments. Scudder's U.S. asset management business is not part of the deal and will remain as a part of Deutsche Asset Management.

Baltimore-based Legg Mason has been rumored to be a buyer in the current market and in previous months it has been reported to be eyeing Merrill Lynch's asset management business. While this morning's deal with Deutsche Bank is on a smaller scale, it will boost Legg Mason's presence in the affluent money management business.

Legg Mason will acquire Scudder Private Investment Counsel offices in four cities -- New York, Philadelphia, Cincinnati and Chicago -- it will also take over some $5.8 billion in assets under management. In exchange, it is paying Deutsche Bank $55 million when the deal closes at the end of December and as much as $26.3 million more after one year based on the revenues of the acquired business at that time.

All of the key executives and portfolio managers at Scudder Private Investment Counsel have signed long-term employment agreements with Legg Mason Investment Counsel, said Mark R. Fetting, president of Legg Mason Asset Management.

Fetting pointed to a geographic fit between the two business as one reason for the deal. He also noted that the acquisition will be immediately accretive to Legg Mason's earnings.

"Through this agreement, we are delighted to combine our strengths with those of Legg Mason's on behalf of our clients," commented Paul Benziger and Charles King, managing directors and senior portfolio managers, Scudder PIC.  

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