The long-time manager of Legg Mason's flagship mutual fund, Bill Miller, is stepping down next year.
After 30 years at the helm of the Legg Mason Value Trust, the company said Thursday that Miller will cede the reins to co-manager Sam Peters. Legg Mason Capital Management said that the transition had been in the works over the past several years.
Peters, 42, was named co-manager of the fund last year and was being groomed to take over for Miller. Legg Mason Capital Management, a unit of Baltimore-based Legg Mason Inc., said Peters will also take over Miller's role as chief investment officer in April.
Miller, 61, will stay on as chairman and manager of the Legg Mason Capital Management Opportunity Trust.
Although the transition had been a long time in the making, it nevertheless marks the end of an era for both Legg Mason and Miller.
"For people who think of Legg Mason, they think of Bill Miller. He's been a part of the brand for a long time," said Todd Rosenbluth, a mutual fund analyst with S&P Capital IQ. "Investors gave this fund thought based on his name alone."
Under Miller's management, the Value Trust fund outperformed the S&P index for 15 years through 2005. The strong performance was in large part the result of Miller's focus on taking risks on stocks poised to grow, Rosenbluth noted. But the fund began faltering in 2006 and has significantly lagged its peers in recent years.
Rosenbluth noted that there was no way to tell how much of the fund's underperformance in the past year could be linked to Peters versus Miller.
"It's unclear what style one can expect to take going forward," he said.
In a release issued by Legg Mason, Miller noted that the transition was a "long and thoughtful" process. He said Peters had been recognized as a potential manager for the Value Trust when he was first hired in 2005.
Miller also noted that he and Peters had made important adjustments over the past year to the Value Trust portfolio.
Legg Mason Capital Management, which specializes in long-term investing for institutional and retail clients, had $8.65 billion in assets under management as of Sept. 30.