Legg shifts $50bn funds arm to US

The American investment group Legg Mason is to shut the bulk of the European asset management operation it took on this year from Citigroup, the financial services powerhouse.

It is understood that Citigroup Asset Management's (CAM) European equity funds are to be managed from the US, from Legg's offices in New York, Pasedena, Boston and Baltimore, where the group is headquartered.

CAM has about $50bn (£28.8bn) under management in its European, Middle Eastern and African funds. Its fixed-income retail funds and some emerging market funds will continue to be managed from London.

Staff at CAM in London were told of the decision on Monday, and most will be put on notice from January. It is thought that up to 30 fund managers and a similar number of support staff may go. Some fund managers will be retained in London to develop products and look after clients.

In June, Legg gave its brokerage to Citigroup and paid $1.5bn in shares and $550m cash in exchange for Citi's $440bn asset management operation.

The deal, completed only a week ago, doubled Legg's assets under management to about $830bn and transformed it into the fifth-biggest investment house in the world. On the same day it announced the Citi deal, Legg took the plunge into hedge funds, buying Permal from Italy's Agnelli family.

Legg'schief executive, Raymond "Chip" Mason, 68, founded his company 43 years ago and took it public in 1974.