Peltz Goes to Bonds From Burgers

NEW YORK (The Street) -- Nelson Peltz may be best known for his takeover of Wendy's(WEN Quote) last year, but now he's betting people will want to save their money in bond funds rather than spend it at a fast food restaurant.

Peltz has been buying up Legg Mason(LM Quote) shares since the early summer and is especially interested in Legg Mason's fixed-income business, Western Asset Management, according to The Wall Street Journal, which broke the news of Peltz's investment in Legg Mason on its front page Monday.

Peltz's bet on Wendy's looks unspectacular so far. The shares are up nearly 40% during the past 12 months, better than Yum! Brands(YUM Quote) and McDonald's Corp.(MCD Quote), while underperforming shares of Darden Restaurants(DRI Quote). Still, Peltz gets a poor grade for timing, since he completed his takeover of the restaurant chain on the same day Lehman Brothers filed for bankruptcy, and Wendy's shares are down more than 10% since then.

What both Legg Mason and Wendy's have in common is their third-class status. Just as Wendy's is the No. 3 hamburger chain, Legg Mason's bond business operates in the shadow of giants like PIMCO and BlackRock(BLK Quote).

Trying to pick up market share in the money management industry probably makes more sense these days than betting on a hamburger chain, however. Notwithstanding the rebound this year, nearly everyone has gotten clobbered in the market and is looking around uneasily about what to do with their money.