Bill Miller, the one-time star fund manager whose name became a byword for “mean reversion”, is parting company with Legg Mason, where he has worked for 35 years.

Mr Miller is buying Legg Mason out of their 50:50 joint venture, LMM, which runs $1.8bn in assets including his Legg Mason Opportunity Trust stockpicking fund, writes Stephen Foley in New York.

His former fund, the Legg Mason Value Trust, outperformed the S&P 500 for 15 straight years, making him the most famous stockpicker in the US, but his run of success came to an abrupt end in 2005 and he gave back all his outperformance over the following six years.

Joe Sullivan, chief executive of Legg Mason, implied that Mr Miller’s funds were no longer large enough to move the needle inside a group that runs $757bn in assets in total.

Bill has been an important part of the growth and success of Legg Mason over the years and we appreciate his many contributions. 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.

Mr Miller added:

This transaction affirms my ongoing commitment to managing our funds and to our investors. I am excited about the future of LMM, and our team is dedicated to our long-term, value-driven approach and to true active management.

Terms of the deal were not disclosed.

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