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NEW YORK, March 4 (Reuters) - Cowen Group Inc (COWN.O: Quote, Profile, Research), a small investment bank, on Tuesday said Kim Fennebresque is retiring as chief executive, effective immediately.

Fennebresque will become non-executive chairman, after previously also serving as chairman. The 57-year-old joined New York-based Cowen in March 1998 from UBS (UBSN.VX: Quote, Profile, Research), where he had been head of the corporate finance and mergers departments.

David Malcolm, 60, was named to replace Fennebresque as chief executive, and appointed to Cowen's board of directors. Malcolm, who is known as Greg, had previously been executive vice chairman, and has worked for Cowen for 12 years, the company said.

The changes were announced five days after Cowen posted a larger-than-expected fourth-quarter loss of $10.7 million, or 86 cents per share. Revenue fell 39 percent to $59.3 million, including declines of 70 percent from equity underwriting and 72 percent from private placements.

In a statement, Fennebresque said: "I am confident that under Greg's leadership, Cowen will successfully weather these difficult markets."

Cowen did not give a reason for Fennebresque's departure. "The decision to retire was Kim's, and Kim's only," spokesman Jean Calleja said. "The board accepted his decision, and reluctantly accepted his resignation."

Lead director John Toffolon Jr said in a separate statement: "Greg Malcolm is the ideal person to lead Cowen at this time."

None of the executives was available for further comment.

Cowen shares closed Tuesday down 7 cents at $7.00 on the Nasdaq. They have fallen more than two-thirds from their record high set in Dec. 2006. The company was spun off by Societe Generale (SOGN.PA: Quote, Profile, Research) earlier that year. (Reporting by Jonathan Stempel; editing by Carol Bishopric)