Legg Mason (NYSE: LM) announced today that it has realigned its organizational structure and the responsibilities of its senior management team. In late 2005, the Company completed a strategic transaction with Citigroup in which it swapped its securities brokerage and capital markets business for Citigroup Asset Management. With approximately $868 billion in assets under management around the world as of March 31, 2006, all of Legg Mason's operations now are devoted to asset management.

Reflecting the integration and strategic rationalization of the acquired businesses that the Company has undertaken since the closing of the transaction, Legg Mason has organized its business into three units: Global Managed Investments, International Asset Management, and U.S. Asset Management. The executives responsible for those efforts are: Mark R. Fetting, 51, (Global Managed Investments), Timothy C. Scheve, 48, (International Asset Management), and Peter L. Bain, 47, (U.S. Asset Management). Mr. Scheve also retains the position of chief administrative officer, with oversight of technology and operations, finance, human resources, legal and compliance, corporate marketing and communications, and other corporate services.

James W. Hirschmann, who became President of Legg Mason effective May 1, 2006, stated, "Legg Mason is fortunate to have a strong team of senior leaders who have broad and deep experience both in our Company and in our industry. This organizational structure is better suited to our current mix of business, and I am confident that this seasoned team will continue to lead our future growth and success. This realignment of our asset management business is a logical step in a dynamic process and more accurately reflects the business and operations of the firm as we now exist."

Global Managed Investments represents a new management approach to the company's mutual fund and managed services business that is consistent with that of other leading asset management companies. With the Citigroup acquisition, this business has grown to become a top-tier competitor and now represents a substantial part of the company's operations. This approach brings together all pieces of the business, including U.S. and international distribution, global fund administration, fund services and other related functions. It includes the Mutual Funds division, which consists of investment management subsidiaries that derive a substantial portion of their revenues from the mutual fund business: ClearBridge Advisors, Legg Mason Capital Management, and Royce & Associates. It also encompasses the Company's branded mutual funds sold under the names of Legg Mason Funds, Legg Mason Partners Funds, Royce Funds and Western Asset Funds. Mark R. Fetting, senior executive vice president, will lead this business.

Mr. Fetting has extensive experience in the mutual fund industry, and has headed both Legg Mason's asset management and mutual fund businesses. One of his core areas of expertise always has been the retail business, which will be an important asset in managing this new organization. In addition to his role at Legg Mason, Mr. Fetting serves on the Board of Governors of the Investment Company Institute and as a director of the Legg Mason Funds and the Royce Funds. Prior to joining Legg Mason in 2000, Mr. Fetting ran a major business for Prudential Financial Group, and played a leading role in the transformation of the firm's overall money management business. He began his career at T. Rowe Price and was a partner at Greenwich Associates.

International Asset Management encompasses the Company's investment management subsidiaries based outside the U.S., consisting of Legg Mason International Equities and Legg Mason Canada. Unlike many of the other Legg Mason subsidiaries, these units are almost always fully supported in their front and back office operations by Legg Mason. Corporate departments that report to Timothy C. Scheve, senior executive vice president and chief administrative officer, provide these services. Mr. Scheve will assume responsibility for this portion of the Company's business.

Mr. Scheve, who joined Legg Mason in 1984, has served as chief administrative officer since 2005, with management responsibility for the Company's overall administrative and operations functions. Prior to that position, he served as president and chief executive officer of the former Legg Mason Wood Walker, Legg Mason's brokerage subsidiary.

U.S. Asset Management represents a functional alignment of U.S.-based investment managers that have as their principal business separate account management. This unit is comprised of the firm's current U.S.-based Institutional and Wealth Management divisions. The investment subsidiaries operating in this sector include Barrett Associates, Bartlett & Co., Batterymarch Financial Management, Berkshire Asset Management, Bingham Legg Advisors, Brandywine Global Investment Management, Legg Mason Investment Counsel & Trust, Legg Mason Real Estate Investors, The Permal Group, Private Capital Management, and Western Asset Management. Peter L. Bain, senior executive vice president, will be responsible for this effort.

Mr. Bain, who previously was responsible for Legg Mason's Wealth Management business, joined the Company in 2000 from Berkshire Capital Corporation, a privately held investment banking firm specializing in the investment management industry. At Berkshire, he was a principal owner and member of the firm's Management Committee. Previously, Mr. Bain was a vice president in the Mergers & Acquisitions Department at Merrill Lynch & Co., specializing in financial institutions.

Legg Mason is a global asset management firm, structured as a holding company, with on-the-ground management capabilities around the world. As of March 31, 2006, its assets under management aggregated approximately $868 billion. The Company has active asset management capabilities in the U.K., Brazil, Japan, Singapore, Chile, Poland, Australia, Hong Kong and the United States. The firm is headquartered in Baltimore, Maryland, and its common stock is listed on the New York Stock Exchange (symbol: LM).

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