* Legg CEO says Peltz not pushing to carve up firm

* Fetting wants to avoid adversarial situation with Peltz

* Fetting calls Peltz and partners sharp business people (Adds details on investor flows)

By Svea Herbst-Bayliss

BOSTON, Nov 11 (Reuters) - Legg Mason Inc (LM.N: Quote, Profile, Research) Chief Executive Mark Fetting on Wednesday denied speculation that hedge fund manager Nelson Peltz, the money manager's newest board member, might be pressing to carve up the firm.

Peltz, an activist investor known for demanding change at jeweler Tiffany & Co (TIF.N: Quote, Profile, Research) and fast-food chain Wendy's/Arby's Group Inc (WEN.N: Quote, Profile, Research), joined the Baltimore-based asset manager's board last month.

Since then, speculation has mounted that Peltz and his firm, Trian Fund Management, might urge Legg, which oversees roughly $700 billion and ranks as one of the world's biggest publicly traded money managers, to spin off its fixed-income business, Western Asset Management, or other units.

Western, which manages the bulk of Legg's assets, has performed better this year after previously suffering problems with structured investment vehicle debt.

Fetting, speaking at the Bank of America Merrill Lynch Banking and Financial Services conference, said neither Legg nor Peltz has expressed an interest in splitting off any of Legg's affiliate units.