(Bloomberg) -- Legg Mason Inc., the money manager best known as home to stockpicker Bill Miller, is folding Miller’s Legg Mason Capital Management division into its ClearBridge Investments equity unit as assets have tumbled.

Sam Peters, who took over management of Miller’s flagship Legg Mason Capital Management Value Trust in May, will continue to lead the LMCM unit, Mary Athridge, a spokeswoman for the Baltimore-based firm, said in an e-mail. Miller will continue managing the Legg Mason Capital Management Opportunity Trust and will not be joining ClearBridge, Athridge said.

Legg Mason is reviewing its business and relationships with affiliates as it seeks to reverse five years of client redemptions. The company is seeking a new chief executive officer after Mark R. Fetting stepped down as CEO in October amid pressure from activist investor Nelson Peltz. Interim CEO Joseph A. Sullivan, the former head of distribution, has said the firm is reviewing and evaluating its current business strategy and is prepared to modify it as appropriate.

Miller led the Value Trust fund to better returns than the Standard & Poor’s 500 Index for a record 15 years before the streak ended in 2006. His performance worsened as he wagered heavily on financial stocks during the credit crisis, prompting a 55 percent decline in his fund in 2008. Assets in the fund have plunged 90 percent from a $21 billion peak in 2007, to $2.2 billion as of Jan. 14, according to data compiled by Bloomberg. Last year, Miller stepped down from the Value Trust, while staying as manager of the $1.05 billion Opportunity fund.

Portfolios and investment teams at ClearBridge, Legg Mason’s biggest stock-fund unit with about $60 billion in assets, won’t be affected by the addition of the Legg Mason Capital Management strategies, Athridge said.

Multiple Strategies

Legg Mason, which managed $648 billion as of Dec. 31, owns multiple investment units with different strategies, including fixed-income manager Western Asset Management Co. and equity managers such as ClearBridge and Royce & Associates. Each affiliate operates independently and has revenue-sharing agreements with the corporate parent.

ClearBridge said in October it was dropping the Legg Mason name from its mutual funds as part of a push to make its brand better known. Western Asset is seeking more control of its fund sales by trying to negotiate a move away from the centralized distribution model in which sales of retail products go through Legg Mason, a person familiar with the matter said in November.

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