As Value Trust's performance faltered, investors bolted. Today, Value Trust has $2.25 billion in assets, down from $20 billion in 2007.

Morningstar's Hughes said Capital Management's funds have had wide swings, with soaring performance in strong markets but below-average returns in bad times.

"It's always been hot and cold," she said.

Miller stepped down as manager of Value Trust last spring and gave up his position as Capital Management's chief investment officer. Sam Peters replaced Miller in both positions.

Peters will become a senior portfolio manager and managing director reporting to ClearBridge's co-chief investment officers, Scott Glasser and Hersh Cohen.

Miller will continue to manage the Legg Mason Capital Management Opportunity Trust fund as part of LMM LLC, a separate entity jointly owned by Legg and Miller. Opportunity Trust has about $1 billion in assets.

Four Capital Management funds with a total of $6 billion in assets will join the ClearBridge lineup. ClearBridge has 14 funds.

Macrae Sykes, an analyst with Gabelli & Co., said the merger of Capital Management into ClearBridge is "just a way of creating efficiencies." The move likely won't affect Legg shareholders, he said.

Legg's stock closed Thursday at $26.74 per share, up a nickel for the day.

eileen.ambrose@baltsun.com

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