Legg Mason's largest shareholder, Shanda Group, plans to increase its stake in the money manager to 15% from 10%, said Legg Mason spokeswoman Mary Athridge.
As part of the agreement, Legg Mason will appoint Tianqiao Chen, chairman and CEO of Shanda Group, and Robert Chiu, president of Shanda Group, to its board of directors by June 1, 2017.
Mr. Chen will join the board as vice chairman. He is also expected to sit on the nominating and corporate governance committee.
Shanda Group agreed to invest at least $500 million in investment strategies with Legg Mason affiliates as part of the deal to increase its stake. Shanda Group has also pledged to make a meaningful contribution to Legg Mason's charitable foundation.
Shanda Group will acquire the additional 5% on the open market as the opportunity arises, Ms. Athridge said.
Shanda Group is a Singapore-based global private investment firm that makes investments across public market equity, fixed income and commodities, private equity and venture capital, and real estate. It acquired a 10% stake in Legg Mason in April.
Legg Mason had $707 billion in assets under management as of Nov. 30.