Thomas J. Gahan has been named president and chief executive officer of Western Asset Management Co., effective immediately.
Gahan succeeds James W. Hirschmann III, who assumes the role of chairman, said a Dec. 3 news release. Gahan currently serves as chairman of Benefit Street Partners, an alternative credit manager with more than $75 billion in assets under management.
Gahan will continue in his role as chairman of BSP, the release noted.
Gahan founded BSP in 2008 and joined Western Asset’s parent Franklin Templeton in February 2019 as part of the BSP acquisition.
As chairman, Hirschmann, who joined the firm in 1989, will “continue to focus on building and strengthening relationships with clients globally,” said the release.
The change in leadership came just a week after the Securities and Exchange Commission charged former Western Asset Management co-CIO Ken Leech with fraud. The agency said Leech engaged in “a multiyear scheme to allocate favorable trades to certain portfolios, while allocating unfavorable trades to other portfolios, a practice known as cherry-picking."
Also, the Justice Department charged Leech with securities fraud, investment adviser fraud, commodity trading adviser fraud, commodities fraud, and making false statements. Between 2021 and 2023, the Justice Department noted, Leech defrauded Western Asset’s clients by engaging in an alleged criminal cherry-picking scheme to favor certain clients' portfolios at the expense of others, assigning over $600 million of gains to favored clients and over $600 million of losses to other clients.
Western Asset has approximately $330 billion in assets under management.
