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Massachusetts' $50.6 billion state pension fund fired five money managers on Wednesday, including the Legg Mason (LM) fund overseen by investment guru Bill Miller, due to poor performance.

The fund's board approved the transfer of about $1.4 billion from the firms -- including Legg Mason Capital Management, Ariel Investments, NWQ, Mazama Capital Management and Gardner Lewis -- into State Street Global Advisors, which is run by

State Street


, according to news reports. State Street will link the assets to the Russell 3000 index portfolio.

Another $400,000 will be transferred to a fund-of-hedge-funds portfolio. The board also approved a $300 million inflation-linked bonds mandate to




The pension fund report cited "inconsistent performance" and a "high level of tracking error" as reasons for the asset shift. Legg Mason's fund has posted particularly weak results due to its investments in the struggling financial sector.

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