Legg's Sherman to retire

Manager lost on Bear Stearns, newspaper firms

March 18, 2009|By Hanah Cho | Hanah Cho,hanah.cho@baltsun.com

Bruce Sherman, whose once-top-performing unit at Legg Mason Inc. was ravaged by losses on investments in Bear Stearns Inc. and several newspaper companies, is retiring at the end of the month.

Sherman, 60, co-founded Private Capital Management, a money manager catering to wealthy investors that Legg bought in 2001 for nearly $1.4 billion. Sherman said in a brief interview yesterday that retirement was a difficult decision.

"I sold the firm in 2001, and there was an inevitability of retirement at some point in time," Sherman said, noting March 31 was a logical time, since it is the end of Legg's fiscal year.

Based in Naples, Fla., Private Capital has had a rough stretch in the past few years. Its assets under management shrunk to $2.4 billion at Dec. 31, 2008, from about $9 billion early last year and $31 billion in 2005.

Baltimore's Legg took a $151 million impairment charge in management-contract values last year because clients stopped doing business with Private Capital.

In November, Sherman stepped down as chief executive officer to focus on investments, with President Gregg Powers taking over that role.

Powers will continue to lead the firm and also oversee the investment process.

Sherman said he's proud of his firm's performance: 18 percent compounded return from 1986 to 2007.

"The last 15 months have brought it down a couple of points because of the very difficult environment that everyone worked in no matter what area you invested in," he said, adding that he thinks the market has hit bottom and is recovering.

Private Capital was founded in 1986 by Miles Collier and Sherman to manage money for the wealthy Collier family.

Sherman said he will stay in Florida, spend more time with his three grandchildren and improve his golf handicap. Sherman also said he's evaluating several offers to sit on corporate boards.

Asked to reflect on his long career, including any regrets, Sherman said, "I think when I sold to a greater partner like Legg Mason, [it] was a good decision. They have been supportive at every turn ... so no regrets. I'm disappointed with the leverage in the economy that has led to some of these problems. That caused difficulty for all people, rich and poor, over the last 15 months."

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