Legg Mason chief to step down Mark Fetting is to step down as chief executive of Legg Mason, the asset manager under pressure from activist investor Nelson Peltz to halt client withdrawals that have persisted for five years. The change may lead to a sale or split of the group which manages a collection of loosely affiliated asset management brands. Mr Peltz, known for pushing for such changes at companies such as Cadbury, will lead the search for a replacement, according to a person familiar with the situation. The move comes before a standstill agreement between Legg Mason and Mr Peltz, its largest shareholder, is due to expire at the end of November. Signed when he joined the group's board last year, it prevents his Trian fund from increasing its 11 per cent stake or pressing for a sale of break up of the company. Talks between Mr Fetting and the board had been going on for some time, the company said. In June Legg Mason had announced its first quarterly loss since 2009, related to costs associated with a restructuring of the group's debt. Mr Fetting joined Legg Mason in January 2008, taking over from the group's founder, Raymond "Chip" Mason, following large losses on mortgage-backed securities acquired from Citigroup. The company praised Mr Fetting for his work as a cost cutter during what it said was "a very challenging period of turmoil in the global financial markets." However, since he joined the company Legg Mason's share price has declined by more than 60 per cent, moving largely sideways since late 2009. Internally, executives at the asset management level have expressed frustration. "Relations between the parent and all the subsidiaries have never been worse," said one. The group has also experienced persistent client withdrawals for five years. While it owns the third-largest manager of bonds, Western Asset Management, the group has largely sat out the rush into fixed income funds since the crisis because of its association with the mortgage problems. The group's star equity manager, Bill Miller, has also misfired. After beating the S&P 500 index every year for 15 years up until 2005, he was then the worst manager in his category for the following five years. The scope for major changes beyond a sale may be limited, however, as a spin-off or sale of the most attractive asset, Western would leave behind a small group of unconnected businesses. In a report to clients, William Katz, analyst for Citigroup said "given some missteps along the way around flows, margins, and the balance sheet, we believe Mr Fetting's goodwill with investors was wearing thin to some degree." Shares in the group closed up 5.4 per cent at $26.85.