ClearBridge Value Strategy on Marsh & McLennan Companies
Thesis
ClearBridge initiated a position in Marsh & McLennan following a substantial valuation decline across the insurance brokerage industry. The managers believe prevailing share prices imply excessively negative expectations for long-term growth. The investment is based on a perceived mismatch between the industry's discounted valuation and underlying prospects. ClearBridge sees an opportunity for value creation if business performance proves more resilient than market expectations.
“we initiated a position in Marsh & McLennan after a sharp derating in insurance brokers left valuations implying overly punitive long-term growth”
Key risks
- Long-term growth could prove weaker than anticipated.
- Further valuation compression could delay recognition of the opportunity.