CORRECTED - UPDATE 1-Legg Mason reports client withdrawals in Feb

Wed Mar 9, 2011 1:19pm EST

(Corrects withdrawals to $3 billion by two investors, from $5 billion by three investors)

* CFO cites February withdrawals at conference

* Says outflows to be offset by market appreciation

BOSTON, March 9 (Reuters) - Two clients withdrew a total of $3 billion from asset manager Legg Mason Inc (LM.N) in February, Chief Financial Officer Peter Nachtwey said on Wednesday.

The outflows would be largely offset by market appreciation during the period, Nachtwey said at a financial conference sponsored by Citigroup Inc (C.N).

The two clients paid low fees to Legg Mason, he said. A performance-only fee client withdrew $2 billion, and a sovereign wealth fund that he did not name took out $1 billion.

Legg Mason is scheduled to release its assets under management for February on March 10. Like several competitors, the company has been trying to reverse a trend of outflows in recent quarters. (Reporting by Ross Kerber; Editing by Lisa Von Ahn and John Wallace)

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