After conducting a worldwide search, Legg Mason Inc. chose as its new chief executive a person with deep Baltimore roots and one with an intimate knowledge of the asset manager's workings.
"I'm thrilled. Honored," Mark R. Fetting said soon after the board voted.
There will be no honeymoon period: The firm's star equity managers have missed targets in an increasing volatile market and Fetting's team must persuade jittery investors to stick with Legg Mason for the long haul.
"It's very difficult to come in behind the founder of a company that has been as successful as it has been," said Burton Greenwald, a consultant to the mutual fund industry.
Fetting distinguished himself after Legg Mason swapped its brokerage business for Citigroup Inc.'s money management unit in 2005 in a deal worth $3.7 billion.
Fetting, a senior executive vice president, was charged with integrating the two firms' mutual funds and streamlining them, ultimately eliminating nearly a third of the 165 funds that were underperforming.
Harold L. Adams, who chaired the board's search committee, said the group considered factors such as intellect, high ethical standards and an understanding of Legg.
"He came in with a business plan and a very thoughtful presentation on where he would take the company and included all the important factors in the committee's minds," he said.
"He was the logical choice," Greenwald said. "I'm surprised it took them so long to announce it."
Fetting and his wife, Georgie Smith, are committed to Baltimore, something analysts said was important after another heir apparent, James W. Hirschmann, relinquished the title of president last year to return to a Legg subsidiary in California. Hirschmann had been named to the post a year earlier.
"He understands the dynamics of the company," mutual fund consultant Geoffrey Bobroff said.
Fetting and his wife were high school sweethearts when she was at Bryn Mawr School and he was at the Gilman School. When Fetting left Maryland to serve as president of Prudential Asset Management Co. in Scranton, Pa., the family opened up their home in the Poconos in 1993 to 22 underprivileged kids from Baltimore. They took the same kids for two weeks every summer for 10 years, and Fetting describes it as "one of the most impactful experiences of my life."
But his most life-altering moment came a year and a half ago. Experiencing chest pains, he called his brother John, a doctor, who directed him to the emergency room. There he was told his left coronary artery was 90 percent blocked and he needed two stents.
Fetting learned to eat better, exercise more, and to "work smartly."
That is sometimes difficult because business is in his blood. His father, John Howard Fetting Jr., was president of A.H. Fetting Co., a Towson jewelery business founded by his Prussian ancestors in 1873.
When Legg Mason moves to its new headquarters in Harbor East, Fetting will be reminded of how far he's come. His mother's family emigrated from Ireland in the 1860s and established a metal foundry, which she ran in an adjacent building.
"I grew up in a family of merchants," Fetting explained, where he learned "service, doing right by customers and commitment."
Sun reporter Hannah Cho contributed to this article.