A couple of years back, Raymond (Chip) Mason decided to give a new twist to the phrase “going out on top.” By any measure, Mason would have been justified in wrapping up his illustrious career and heading off into the corporate sunset in style. Forty-four years earlier he had gone into business for himself by starting a small brokerage firm in Virginia, then steadily built it with a series of modest acquisitions into a Baltimore-based regional brokerage with a thriving money management arm. His star performer, stock-picking guru Bill Miller, had earned himself and the firm widespread renown.

But Mason, 70, couldn’t resist one more deal — by far his biggest and boldest. Seeing a once-in-a-career chance to utterly transform his firm, he agreed to swap his brokerage business for Citigroup Asset Management, the money management arm of the global banking giant, in a transaction valued at $3.7 billion. It was no easy decision, as Senior Writer Michael Shari explains in “Shake a Legg,” this month’s cover story (page 42); the securities business, after all, was where the firm began.

Nor has Legg Mason’s transformation into one of the world’s biggest money managers been an easy one. The firm allowed previous acquisitions to operate independently; now it is closely integrating Citi’s businesses with its own. The process has been slower and more costly than expected. Worse, the performance of Legg’s funds has slumped badly this year. Once-enthusiastic shareholders have grown restless. Although they initially pushed the company’s share price up to $140 from its predeal level of $84, lately it has been trading in the mid-90s.

Complicating matters: Mason now plans to retire in one or two years. The task of making sure this complex integration works, and of putting a little oomph back into the stock, falls to James Hirschmann, who this summer was named president and chief operating officer of the merged entity. He’s moving quickly — streamlining the mutual fund lineup and looking to launch new fixed-income products off Citi’s global platform — but it will be quite a challenge making sure that Chip Mason goes out on top

Michael Carroll

Editor