Smith Barney ends exclusive Legg fund deal

Smith Barney's exclusive deal with Legg Mason to distribute funds run by Bill Miller — the Legg portfolio manager best known for beating the markets for 15 consecutive years — has come to an end. The marketing pact, which was inked in 2005 after Baltimore-based Legg Mason Inc. swapped its brokerage battalion for the asset management business of New York-based Citigroup Inc., Smith Barney's parent, has expired and will not be renewed, Legg Mason spokeswoman Mary Athridge confirmed. Now, all of the funds managed by Mr. Miller's Legg Mason Capital Management, including his once-vaunted Legg Mason Value Trust, can be distributed through any brokerage. Ms. Athridge said New York-based Smith Barney's impending merger with the brokerage business of Morgan Stanley of New York played no role in ending the marketing pact with LMCM, and added that the agreement simply expired on Feb. 19. She also pointed out that the marketing agreement was tweaked in September 2007 to give Smith Barney brokers exclusive rights to distribute only the primary shares of LMCM's funds. Mr. Miller's run of beating the Standard & Poor’s 500 stock index for 15 consecutive years came to an end in 2006 when the Value Trust's 5.9% return lagged the index by 9.9 percentage points, according to Morningstar Inc. of Chicago. He has continued to underperform the benchmark since then. In 2008, the Value Trust lost 55.1%, underperforming the S&P 500 by 18.1 percentage points, according to Morningstar.