50% of Bill Miller’s hedge fund is in Bitcoin

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Legendary investor Bill Miller said on the WealthTrack podcast with Consuelo Mack released last week that half his MVP 1 hedge fund is currently invested in Bitcoin.

After working for 35 years at Legg Mason, in 2016 Miller founded Miller Value Partners. At MVP, he managed a fund that beat the S&P 500 for 15 straight years through 2005. His strategy is known to rely on concentrated bets, but nothing on the scale of half a fund. According to Miller, in 1990s his fund had 20% in AOL, almost 20% in Dell and 10% in Fannie Mae.

Later this October, The Wall Street Journal reported that almost 33% of the fund is stored in Bitcoin and about $154 million are stored in assets under management. However, at that stage Bitcoin was valued around $6,000, but since then it more than tripled to above $19,000 as more investors have come into the cryptocurrency market.

At this point, Miller’s overall firm manages $2.2 billion in a variety of assets, including separate accounts for high net worth individuals and mutual funds. He said on the podcast:

“What we’re studying is ways in which we can mitigate risk to the overall fund and the portfolio; it won’t be 50 percent of the fund for that much longer, which does not mean necessarily that we’re going to be selling it.”

Miller stated that the hedge fund has not bought any other cryptocurrencies yet and at the moment it is not interested in doing so. He said:

“Most of those cryptocurrencies, if monetary history is any guide, will be worthless.”

Despite this, Miller mentioned that his son – who is currently working as a portfolio manager at Miller Value Partners – has been pitching him on a coin that is holding an initial coin offering in about month which is the “first one that he’s looked at that he thinks is investible.”

The hedge fund invested in Bitcoin back in 2014 and 2015 for an average price of $350. According to Forbes, Miller put 1% of his net worth in Bitcoin in 2014.

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