Legg Mason names exec next CEO

Legg Mason Inc. named Mark Fetting chief executive to succeed Raymond Mason, who over 46 years built a regional stock brokerage into the No. 2 publicly traded money manager in the U.S., with $1 trillion in assets under management.

Fetting, 53, was previously responsible for mutual funds at the Baltimore-based company. Mason, 71, had been looking for a successor since April when James Hirschmann, then chief operating officer, backed out of a plan to take over.

The company’s stock fell 23% last year as earnings were hurt by equity-fund outflows and subpar returns from managers including star stock picker Bill Miller. Legg Mason lined up $1.5 billion for some of its money-market and cash funds after they bought short-term debt that plunged in value amid the collapse of bonds backed by sub-prime mortgages.

Legg Mason shares Monday rose $2.09, or 3%, to $72.05. They are down 3% this year.

Fetting joined Legg Mason in 2000. Before that, he was president of retirement services at life insurer Prudential Financial Inc.

Mason, who will serve as nonexecutive chairman of Legg Mason, swapped the firm’s brokerage operation for Citigroup Inc.’s asset-management unit in late 2005, doubling assets.

Legg Mason’s fixed-income unit, Western Asset Management, is based in Pasadena.

New York-based BlackRock Inc. is the biggest publicly traded asset manager, with $1.4 trillion in assets under management. Closely held Fidelity Investments oversees $1.5 trillion. Vanguard Group Inc., owned by its fund shareholders, manages $1.3 trillion.

Legg Mason’s growth was helped by Miller’s 15-year track record of beating the Standard & Poor’s 500 index, a streak that ended in 2006.