Legg Mason Appoints President
Investment management giant Legg Mason Inc. said Thursday that its board picked the chief executive of its Pasadena-based Western Asset Management division to be president of the parent company.
The move will put James W. Hirschmann in line to succeed Raymond A. “Chip” Mason as CEO of Legg Mason, which last year became one of the world’s biggest investment firms by acquiring Citigroup Inc.’s asset management business.
Western Asset, founded as an investment arm of United California Bank in 1971 and purchased by Baltimore-based Legg Mason in 1986, has grown to be a powerhouse in the bond business. It is a rival to Pacific Investment Management Co. of Newport Beach, or Pimco, perhaps the best-known bond investment company.
Western Asset mushroomed in size last year after Legg Mason took over Citigroup’s money management business and put the bulk of the assets under Western Asset. It now manages about $530 billion of Legg Mason’s $850 billion in client assets.
Hirschmann, 45, a Philadelphia native, joined Western Asset in 1989. He became CEO in 1999; assets then were $60 billion.
Nicholas St. George, Legg Mason’s lead independent director, said that as the board focused on succession planning, “we reached a unanimous conclusion that Jim is the right person to become president of the company.”
Hirschmann said his primary challenge in the near term would be to integrate the Citigroup bond operations with Western Asset. He has experience in that area: In the late 1990s he directed the melding of Legg Mason’s London investment operations with the U.S. parent.
Longer term, Hirschmann said, the money management business faced the challenge of catering more to 401(k) savings plans and other so-called defined-contribution retirement programs. Assets in those plans have grown far faster in recent years than assets in many traditional pension funds.
The Citigroup deal brought Legg Mason a new stable of retail mutual funds -- the Smith Barney funds -- that could be pitched to 401(k) plans, adding to its own Legg Mason, Western Asset and Royce brand funds.
Chip Mason, 69, said he believed that Hirschmann would be “an outstanding president and future leader” of the company. Mason said he expected to stay on as CEO of Legg Mason for about two years.
Mason is a veteran figure on Wall Street. He founded Mason & Co. in Newport News, Va., in 1962 and built it into a major brokerage and fund manager.
In the deal last year that vaulted Legg Mason into the top tier of money managers, the firm swapped its brokerage business to Citigroup in return for the latter’s asset management unit. The move got Legg Mason out of a business in which it was a mid-range player and cemented its position as a leader in money management.
Legg Mason shares slipped 28 cents to $126.02 on Thursday before the announcement.
When Hirschmann moves up, D. Daniel Fleet, 48, will become president of Western Asset, Legg Mason said.
