Legg Mason hit by first loss in 25 years

Legg Mason has reported its first loss in at least 25 years and become the first big fund management group to raise public capital to shore up losses arising from the credit crisis.

Legg, which three years ago took over Citigroup’s asset management business, said on Tuesday that it had lost $255m during its fiscal fourth quarter, after taking a $291m charge against losses in its money market funds.

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Legg, which manages money market funds, equities and fixed income, said investors pulled out $19bn in the quarter and its market losses amounted to $28bn.

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Acknowledging that its equity managers – including its flagship fund manager, Bill Miller – had also been underperforming, Mr Fetting said: “We are seeing growth outside the US but we know that we need our US equity managers to return to form and this is a top priority.”

Mr Miller’s Value Trust lost 20 per cent of its value in the quarter, according to Morningstar.