(Bloomberg) — Legendary investor Bill Miller is beginning to hand over the reins at his money management firm and is tapping his protege to take over its flagship fund.
Samantha McLemore, who joined Miller after graduating from college 20 years ago, will assume the day-to-day management of the $2 billion Miller Opportunity Trust through her firm, Patient Capital, according to a statement Tuesday. His eldest son, Bill Miller IV, will become the lead manager for the Miller Income Fund as well as the majority owner of the family firm that advises it.
Miller Value Partners, based in Baltimore, will request approval this year of the changes outlined in the succession plan from the trustees for the two funds. The elder Miller will continue to co-manage both funds with his son and McLemore until the end of 2022.
The changes mark the first formal steps that Miller, 71, is taking to relinquish control of the business he founded in 1999. The vaunted stock picker redefined the concept of value investing and became an early advocate of digital currencies. The succession follows a period of weaker performance in 2021 for the flagship after strong gains in 2020 lifted the fund’s five-year returns into the top 2% of peers.
“Having passed my biblically allotted three score and ten years, it is both prudent and in the best interests of the funds’ shareholders to begin the transition of the funds’ management and the firm’s ownership from me to the next generation of portfolio managers and owners,” Miller said in the statement.
Miller had been discussing succession with McLemore, 41, who has been a portfolio manager of the Opportunity Trust for more than a decade, in recent years. He has worked with her since 2002, when she graduated from Washington & Lee University and became a junior analyst at his firm.
Bill Miller IV, 40, worked for Legg Mason Capital from 2008 to 2013 and joined Miller Value full-time in 2013. He has co-managed the Miller Income Strategy since its 2009 inception.
In July 2020, McLemore decided to strike out on her own of sorts by starting Patient Capital, an institutional money manager backed in part by Miller. It returned 75% in the second half of that year.
Miller rose to prominence by leading Legg Mason Value Trust to outperform the S&P 500 annually from 1991 through 2005. He stepped down as manager in 2012 and eventually left Legg Mason Inc. to go solo.
He gained further attention in 2014 when he revealed he owned Bitcoin through personal investments. He said last year the Opportunity Trust may invest in the Grayscale Bitcoin Trust.
The Income Fund, which invests in stocks and bonds, generated a 29% return in 2021 and has an average annual return of almost 11% during the past five years. The larger Opportunity Trust, which has about $2.2 billion in assets, fell almost 4% last year but has averaged annual returns of almost 15% during the last five years.
Miller Value Partners managed $3 billion as of Nov. 30.
(Adds McLemore’s background starting in the second paragraph.)
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