Peter Wilby, Citigroup Asset Management's star manager of emerging market debt and high yield bonds, has struck a deal with Legg Mason to set up a new fixed-income business in New York.

Legg Mason finalised a $3.7bn (€3.1bn) deal with Citigroup yesterday in which the US fund manager swapped its private client brokerage and capital markets businesses for Citigroup's worldwide asset management operations.