The Dublin-domiciled Legg Mason Capital Management Value fund is set to be rebranded as the Legg Mason ClearBridge Value fund, marking the final stage of its management transition from Bill Miller to Sam Peters.
The US version of the fund has already been renamed as the ClearBridge Value Trust.
The name change for the Dublin version of the fund is set to be implemented later this year and comes after Mr Peters and his team moved across to the Baltimore offices of ClearBridge Investments last year.
ClearBridge is one of Legg Mason’s affiliate companies and has its own range of successful US equity funds, including the Legg Mason ClearBridge Aggressive Growth fund, co-managed by Richie Freeman and Evan Bauman.
But Legg Mason has sought to merge Mr Peters’ Legg Mason Capital Management brand into the ClearBridge brand in order to make the franchise less identified with Mr Miller and attempt to stem several years of outflows from the fund.
At its peak before the financial crisis, Mr Miller had been running more than $21bn (£10.7bn at the time) in the Value Trust, having attracted investors by outperforming the S&P 500 index for 15 consecutive years, starting in 1990 – a notoriously difficult achievement.
However, Mr Peters now manages $4.5bn on the strategy, which includes the US fund, the Dublin-domiciled version and a UK-based fund, Legg Mason US Equity, which will not have its name changed.
Speaking exclusively to Investment Adviser, Mr Peters said the integration with ClearBridge had been “deliberately a slow process” but that it was “going well”.
Mr Peters said ClearBridge “did not want to mess with my process” and didn’t want him doing the same to the existing ClearBridge managers.
While Mr Peters has a very strong focus on value, the philosophy on the other ClearBridge US equity teams is one that centres around “quality”, he said.
Mr Peters said: “ClearBridge wants quality companies but sometimes that is expensive and low quality is cheap so, in that case, I am going to own a lot of low quality.”
He gave the example of Facebook, which he bought at $19.20 per share, but then sold at $50. Mr Freeman and Mr Baumann still hold it in the Aggressive Growth fund because they see it as a high-quality business, but the valuation has become too high for Mr Peters to be comfortable with.
In spite of the style differences, Mr Peters said he was likely to benefit from the extra resources at ClearBridge and said that while the firm was “very different in terms of research, it is another source of inputs”, which helps in bringing in new ideas.
He said he welcomed the fact that ClearBridge and his team had “very different cultures”, given that he looked for “debate” rather than “consensus” so he thought the integration could become a “strength” for the combined firm if it was done right.
