Legendary mutual-fund manager Bill Miller cuts ties with Legg Mason

The stockpicker reached a deal to buy out Legg Mason's stake in the entity housing his funds, which he'll continue to run

Aug 11, 2016 @ 12:42 pm

By John Waggoner

Bill Miller is leaving Legg Mason, but shareholders of the funds he runs won't notice.

Mr. Miller reached an agreement with Baltimore-based Legg Mason (LM) to buy all of its interest in LMM LLC, which provides investment management services to Legg Mason Opportunity Trust (LMOPX), Miller Income Opportunity Trust (LCMNX) and related strategies. There will be no changes to the investment team or portfolio management responsibilities as a result of the transaction, Legg Mason said in a statement.

Mr. Miller gained rock-star status running Legg Mason Capital Management Value Trust (LMVTX), which beat the Standard & Poor's 500 index for 15 consecutive years, starting in 1991. Morningstar named him mutual-fund manager of the decade in 1999.

The 2007-2009 bear market and financial crisis nearly ruined his reputation. Mr. Miller bought into financials and housing stocks too early. The fund fell 55%, versus 37% for the S&P 500. He stepped down from the fund, now renamed ClearBridge Value Trust, in 2012.

Mr. Miller made a comeback with Legg Mason Opportunity Trust in 2012 and 2013. The fund's fortunes have suffered since then, however: It has just one star from Morningstar, and its three-year performance puts the fund in the 70th percentile in its category.

So far this year, the fund is down 8.5%, versus a 7.88% gain for the S&P 500.

“The fund has had a significant struggle this year," said Samantha McLemore, co-portfolio manager for Legg Mason Opportunity Trust. “The market got concerned about economic weakness earlier in the year, and we saw a massive selloff in cyclical stocks.”

Ms. McLemore said the spinoff from Legg Mason had been in the cards since at least 2012. “When the rest of our group was merged into ClearBridge, Bill wasn't interested in being part of that merger,” she said. “We knew something was going to happen here. More recently it was agreed upon how that would work.”

Joseph A. Sullivan, chairman and CEO of Legg Mason, noted in a statement that Mr. Miller "has been an important part of the growth and success of Legg Mason over the years and we appreciate his many contributions."

Mr. Sullivan added: “We wish Bill and his team continued success in the future. Today's announcement is consistent with Legg Mason's strategy of focusing on our nine diverse managers with size and scale that can be leveraged across global distribution.”

LMM has about $1.8 billion in assets. Terms of the sale were not disclosed.

0
Comments

What do you think?

View comments

Recommended for you

Reporter Ryan Neal discusses how investors inside and outside financial advice have become interested in the industry's technology, and introduces us to some top people fueling the trend.

Recommended Video

Channels

Latest news & opinion

Funds that missed the January rally some by a little and some by a lot

Here are 10 funds that whiffed when at bat against the S&P 500 index, and why they struck out.

Treasury market pummeled in its worst January since 2009

'Melt-up' of yields pushes 10-year to 2.74%, its highest level since 2014

These funds have gained more than 10% in just a month

And not all of the funds did it with tech stocks

As Finra elder-abuse rule takes effect, advisers will face awkward conversations

Regulation taking effect Monday requires reasonable effort to find trusted contact, allows brokers to stop fund disbursement.

As Trump prepares for State of the Union, 50% of advisers approve of his job performance

Percentage is 10.3 points higher than the general population approval rating.

X

Hi! Glad you're here and we hope you like all the great work we do here at Mopedia. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting Mopedia.com? It'll help us continue to serve you.

Yes, show me how to whitelist Mopedia.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Last News

chase ira account blackrock large cap core social security cola calculation www ameriprise lsvex american century one choice in retirement portfolio class a 401k mandatory distributions early withdrawal from ira without penalty aon hewitt funds rollover ira to 401k rules definition of iras ascent private capital management of us bank what is a chartered financial planner vanguard short term municipal bond fund phoenix life insurance company hartford ct t rowe price retirement funds review gregory vaughan morgan stanley private wealth management why was social security created in 1935 wells fargo locations in greenville sc loomis sayles limited term government and agency fund how to file fbar for previous years fidelity us focused stock fund sei institutional investments trust vanguard 2045 retirement fund amt free muni bond etf charles schwab broker salary t rowe price retirement 2020 fund no load mutual funds with low minimum investment pimco total return r fund loomis sayles strategic income fund class a ex spouse survivor benefits what is the medicare tax rate for 2014 sit dividend growth fund