Legg Mason picks president

Hirschmann to follow `Chip' Mason at money management firm

March 24, 2006|By LAURA SMITHERMAN | LAURA SMITHERMAN,SUN REPORTER

Legg Mason Inc. announced yesterday the election of James W. Hirschmann as president, making him the heir apparent to Raymond A. "Chip" Mason, who built the Baltimore firm that bears his name from a regional stockbroker to the fifth-largest money manager in the world.

Hirschmann, 45, has been with Western Asset Management since 1989, three years after Legg Mason bought the fixed-income firm in its first acquisition of another money manager. Since then, Western has grown into a major force in bond investing as Legg has become a major player in the investment business, recently doubling the assets it manages on behalf of clients to $850 billion through a transaction with Citigroup Inc.

"Jim had actually run a business that has grown spectacularly and was our largest," Mason said in an interview yesterday. "He also had the broadest global experience of any manager in our company."

Hirschmann's election by the board of directors comes as Legg Mason is working to absorb about $400 billion in assets from New York-based Citigroup.

Through that deal and another with Stifel Financial Corp. of St. Louis, Legg shed its brokerage and investment banking operations to focus solely on investment. Mason, 69, has said he would stay on at the company for at least two years to ensure a smooth integration, and said yesterday that he might stay on as chairman while a new chief executive officer takes over.

Mason's retirement would mean the loss of the face of the company. He has been chairman, CEO and president since the 1970s, about a decade after he had founded a brokerage in Virginia that merged with Legg & Co. in Baltimore.

Hirschmann, who has been working from Western Asset's headquarters in Pasadena, Calif., has not been a frequent figure at the parent company.

But analysts and insiders said he has built a reputation as a good and personable leader.

Hirschmann, who was born in Philadelphia and has family ties to the Baltimore area, said he plans to move here. He will become president on May 1.

The company's deliberative succession planning, which has been under way for 18 months, and a slow transition at the CEO-level should avert any upheavals at the company, said Franklin Morton, a vice president and financial company analyst at Ariel Capital Management, which doesn't own any shares of Legg Mason.

"Following a legend is always a difficult task, and these are some big shoes to fill," Morton said. "But first of all, Chip Mason isn't going anywhere in the near future. ..." Second, everybody knew something like this was coming; they just didn't know whose name would be on the press release."

Others who had been rumored to be in the running for the top job were Mark Fetting, a senior vice president who heads up mutual funds; Peter Bain, head of wealth management; and Timothy Scheve, chief administrative officer.

"In the last six to 12 months, when everyone has been talking about who would replace Chip, Hirschmann was always right up there with the other people," said Anna Dopkin, a portfolio manager at T. Rowe Price Group Inc. "They had a deep bench."

At Western Asset, where Hirschmann is president and CEO, he has been credited with leadingthe division's international efforts from London and with helping the company to grow from about $20 billion in assets to more than $250 billion in the last decade. With the Citigroup deal, Western will take on another $270 billion.

Hirschmann said he plans to focus at first on Western's expansion and in the long run on expanding Legg Mason.

"The asset management business is a tough business, and putting up good solid investment returns is easier said than done," he said. "Chip has built an outstanding firm with some of the most talented investment professionals you can find."

Before joining Western Asset, Hirschmann served as vice president at Invesco Trust Co. in Denver and before that at Atalanta Sosnoff Capital LLC in New York.

Legg Mason board member Harold L. Adams said he sees some of Mason in Hirschmann: "We think he's got the personality and the people skills of someone like Chip Mason, and we're looking for someone who can continue to be a visionary and continue to grow this company."

laura.smitherman@baltsun.com

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