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Wednesday, January 5, 2022

Bill Miller Divides and Passes His Reins

Reported by Neil Anderson, Managing Editor

A famed value investor is preparing to pass and divide the reins as he rides off into the sunset.

William Herbert "Bill" Miller III
Miller Value Partners LLC
Chairman, Chief Investment Officer, Founder
Yesterday, Bill Miller, chairman and chief investment officer of Miller Value Partners LLC, confirmed that he is initiating his succession plan. Effectively, two successors will rise, with one boutique asset manager and one mutual fund per successor (all based in Miller Value's hometown of Baltimore). And Miller himself will remain a backer of both. (The funds' changes are subject to approval by the funds' boards and shareholders.)

Patient Capital Management LLC will take over as investment advisor of Miller Value's larger fund, the Miller Opportunity Trust. (First launched in 2000, the fund had $2.27 billion in AUM as of November 30, 2021; that's about 73 percent of Miller Value's total AUM.) Miller Value portfolio manager Samantha McLemore founded Patient in 2020, and the firm had $281 million in AUM as of November 30, 2021. (Patient currently focuses on institutional investors.) She has PMed Miller Opportunity alongside Miller for more than a decade, and Miller will continue to co-PM the fund with her this year.

"I've found his mentorship and guidance invaluable. I enjoy every moment working with him on the markets and intend to preserve that relationship as far as the eye can see," McLemore states. "Though our formal responsibilities will change, the essence of our passion for the markets and pursuit of investment excellence will not. We've developed an outstanding team who stand ready to continue to execute the very same investment process that has historically proven so successful for us."

Meanwhile, Bill Miller's eldest son, portfolio manager Bill Miller IV, will take over as majority owner of Miller Value, and Miller Value will continue to run the Miller Income Fund. (The fund launched back in 2014 and had $251 million in AUM as of November 30, 2021.) For this year, the retiring Bill Miller i.e. Bill Miller III, will continue to co-PM Miller Income alongside the younger Bill Miller.

Bill Miller IV hints at future product development at Miller Value.

"We look forward to offering an equity-oriented ETF to the marketplace in 2022," the younger Bill Miller states. "Separating the firm into two components allows Miller Value Partners to concentrate its efforts on offering publicly available investment products to a wide range of investors."

Meanwhile, post-transition, the elder Bill Miller will be a minority owner of, and senior advisor to, both Miller Value and Patient. He'll also continue to be the largest individual investor in both Miller Income and Miller Opportunity.

"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," the elder Bill Miller states. (He turned 71 last year.) He praises his two successors for their "independent thinking, emotional stability, and ... keen understanding of individual and institutional behavior."

"They are two of the most talented investors I know," Bill Miller III adds.

Bill Miller III founded Miller Value Partners (then called LMM) in 1999. LMM separated from its Legg Mason Capital Management affiliate in 2013. Then, at the end of 2016, LMM parted ways with Legg Mason. He also previously led Legg's equity funds management division, co-founded LMCM (alongside Ernie Kiehne), and PMed the Legg Mason Capital Management Value Trust for decades (famously beating the S&P 500 for 15 years in a row before hitting a rough patch).

Before joining Legg in 1981 as director of research in 1981, Bill Miller III worked at JE Baker Company as treasurer, and before that he was a military intelligence officer. He is an alumnus of Johns Hopkins University and of Washington and Lee University.

McLemore joined LMM as a PM in 2008 after six years as an analyst with LMCM. She is an alumna of Washington and Lee University.

Bill Miller IV joined LMM full time in 2013 as an assistant PM, and he rose to PM in 2017. Earlier, he worked as an analyst at LMCM and McKinsey. He is an alumnus of the Tuck School of Business at Dartmouth and of Tufts University.

Editor's Note: This story's headline has been updated for clarity. To confirm, Biller Miller III is retiring this year, and two successors are rising up. 

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