Bloomberg News

Bill Miller Joins Novogratz Owning Bitcoin in ‘Venture Bet’ (2)

March 20, 2014

Bill Miller, the fund manager best known for value stock picks at Legg Mason Inc. (LM:US), said he owns Bitcoin through his personal investments, adding to a chorus of investors touting the virtual currency’s potential.

“Bitcoin is like making a venture bet,” Miller, who beat the Standard & Poor’s 500 Index for a record 15 years through 2005 when he ran the Legg Mason Capital Management Value Trust, said today in an interview on Bloomberg Television’s “Surveillance” with Tom Keene. “The potential return is huge.”

Miller, 64, joins Michael Novogratz, a principal at private-equity firm Fortress Investment Group LLC, in buying bitcoin, a digital currency that has attracted attention from investors and regulators. Novogratz said in October he’d taken a “nice little Bitcoin position” with his own money. Pantera Capital Management LP, which manages money for Fortress executives, disclosed in a December regulatory filing that it had formed a $147 million investment fund for Bitcoin.

Created by an anonymous developer or developers using the name Satoshi Nakamoto, Bitcoin is the most popular digital currency. Governments around the world are grappling with how to classify and regulate virtual currencies while exchanges have struggled to defend holdings from theft.

Hackers may have stolen more than $390 million in Bitcoin from Tokyo-based Mt. Gox, once the world’s largest exchange for digital currency transactions. The price has dropped 28 percent since Jan. 31 to $608.82 yesterday, according to the CoinDesk Bitcoin Price Index.

‘Technological Experiment’

Bitcoin is “an interesting intellectual and technological experiment,” Miller said, adding he would buy Bitcoin for his funds “when Bloomberg can get a quote on it and it can be securely stored.”

Cameron and Tyler Winklevoss, the twins who claimed Mark Zuckerberg stole their idea for a social-networking website to start Facebook Inc., have said they are seeking to open the first exchange-traded fund tracking the virtual asset.

Goldman Sachs Group Inc. analysts said in a report last week that Bitcoin may have a future as an innovative payments technology instead of gaining wider use as a true alternative currency. Bitcoin’s underlying technology could also enable new methods for payments and e-commerce.

Miller stepped down from the Legg Mason Value Trust in April 2012 after returns slumped following the financial crisis. He continues to oversee the $2.2 billion Legg Mason Opportunity Trust (LMOPX:US), co-managed by Samantha McLemore. It has returned an annual average of 31 percent over the past five years, beating 97 percent of peers, according to data compiled by Bloomberg.

Miller also opened his own new fund, the Miller Income Opportunity Trust, on Feb. 28. He manages the fund with his son, William Miller IV. The fund is overseen by LMM LLC, an investment firm that is owned in equal parts by the Millers and Legg Mason.

To contact the reporter on this story: Christopher Condon in Boston at ccondon4@bloomberg.net

To contact the editors responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net Sree Vidya Bhaktavatsalam, Pierre Paulden


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • LM
    (Legg Mason Inc)
    • $54.45 USD
    • -0.06
    • -0.11%
  • LMOPX
    (Legg Mason Opportunity Trust)
    • $18.28 USD
    • 0.14
    • 0.77%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus