A former Fidelity fund manager is returning to the mutual fund industry after spending nearly a decade on the hedge fund side of the fence. Brian Posner, who left Fidelity in 1996, will lead the investment side of Legg Mason's yet-unnamed, $112 billion equity mutual fund group based in New York City. That division will include funds acquired from Citigroup, but not the Legg Mason funds managed by Bill Miller's group.

Legg Mason acquired the fund group that now carries the Salomon and Smith Barney brands from Citigroup in exchange for its brokerage operations last June. That deal is expected to close by November 1.

The firm also told employees in an internal memo that it would divide the international and fixed-income funds groups it is acquiring from Citigroup into two divisions.

Michael Even, global chief investment officer for Citigroup Asset Management, will run the international group based in London.

Meanwhile, Legg Mason will fold Citigroup's bond funds into its Western Asset Management affiliate that will remain in Pasadena, California, under WAM CEO Jim Hirschmann.

The firm is also appointing Citigroup veteran Stephen Hopkins as head of its mutual funds and managed services. Peter Bain, a Legg Mason employee, will oversee the firm's wealth management business.

Posner was the portfolio manager of the $15 billion Fidelity Equity-Income II fund when he resigned to join Warburg Pincus (now part of Credit Suisse Asset Management). He left that firm in 1999 to found Hygrove Partners, a hedge fund manager.

At Legg Mason, the 44-year-old Posner will report to Mark Fetting, president of Legg Mason Asset Management, and take the title of chief executive officer of the unit when he officially joins Legg Mason on November 1.

Posner told reporters that he will focus on adapting Legg Mason's investment team to a new environment will they will be at the heart of the firm's business rather than a small sideline.

Separately, Institutional Shareholder Services and Glass Lewis & Co. both recommended to clients that shareholders in three closed-end Salomon funds retain Citigroup as their subadvisor after the swap with Legg Mason is completed.  

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