US money manager Legg Mason has announced it is bailing out a money market fund and will take a related charge of $195 million as a result of the credit market turmoil.

Legg Mason, a US-listed asset manager, has entered into capital support agreements to provide support to a money market fund of a subsidiary, Reuters reported.

Under the agreements, Legg Mason will make capital contributions to the fund if the fund realizes a loss on the sale, or certain other events, relating to two asset backed commercial paper securities in the portfolio, it said. It will contribute up to $400 million to the fund, Legg Mason said.

Money market funds have been popular with investors because they are considered very safe, but now that the underlying securities issued by the structured investment vehicles are sinking, an increasing number of firms are using their own money to protect investors.