Plus, Wasatch Small Cap Growth closing, Brookfield buys Fairholme's General Growth equity stake, and more.
Larry Pitkowsky and Keith Trauner, former portfolio comanagers of Fairholme
The two managers recently formed GoodHaven Capital Management, LLC. Similar to Fairholme Capital Management, it will be a value-oriented, go-anywhere firm that builds focused portfolios.
While Bruce Berkowitz's firm has trimmed its separately managed accounts over the past few years, GoodHaven plans to start managing separate accounts for high-net-worth individuals, institutions, and retirement plans in February.
Pitkowsky joined Fairholme in 1999 and was a portfolio manager with the fund from 2002 until 2007. Trauner joined Fairholme in 1999 and was a manager from 2006 to 2008.
One of GoodHaven's first clients will be Tom Gayner's Markel Corporation
Wasatch Small-Cap Growth Closing
Wasatch Advisors announced late last week that it intends to close Analyst Pick Wasatch Small Cap Growth
The fund will remain open to existing shareholders and investors will still be able to purchase the fund directly from Wasatch.
In a statement, Wasatch said it likes to close funds before assets rise to a level where they would have to alter the funds' investment strategy. The fund has grown from $912 million to more than $1.4 billion in assets over the past 12 months due to approximately $216 million in inflows and strong performance. Its 28.9% return in 2010 led the average small-growth fund by 2 percentage points and beat 64% of its peers.
Invesco to Close All Small-Value Funds
Invesco announced the closing of all of its small-cap value funds as well as some mid-cap value funds that also invest in small-cap stocks.
Invesco Special Value
Invesco said that as total assets in the funds have increased, it has become harder for the funds to invest in small caps without compromising their strategies.
Fairholme Sells General Growth Equity Stake to Brookfield
Brookfield Asset Management Inc.
That's Fairholme's entire equity stake in General Growth. The fund, however, still owns warrants to acquire common shares in General Growth.
In an interview with Morningstar, Fairholme manager Bruce Berkowitz said shareholders have gained about $1.4 billion so far on its initial General Growth investment. Some of Fairholme's debt holdings in the company returned more than 20% annualized since Fairholme's initial investment in late 2009.
Berkowitz said Fairholme now has approximately $4.5 billion in cash, or about 23% of assets for the $19.7 billion fund.
The transaction increases Brookfield's ownership of General Growth from approximately 27% to 38%. Brookfield will issue 27.5 million Class A shares valued at $907 million to Fairholme based on stock market prices and pay $804 million in cash to acquire the General Growth shares. On completion of the transaction, Fairholme will own a 4.5% equity interest in Brookfield.
Berkowitz said he was attracted to Brookfield because he thinks it is a "large and growing business that Fairholme can own for a long time."
Goldman Portfolio Manger Takes Top Post at SEC
The Securities and Exchange Commission has hired Eileen Rominger, the global chief investment officer of Goldman Sachs Asset Management
The division oversees the mutual fund industry and is heavily involved in the SEC's recent target-date fund disclosure and 12b-1 reform proposals.
Two of the mutual funds Rominger helped run, Goldman Sachs Growth and Income
Prior to joining Goldman almost a decade ago, Rominger spent nearly two decades as a portfolio manager at Oppenheimer Capital.
SEC Issues Report on Financial Adviser Oversight
The SEC recently issued a report required by the Dodd-Frank Wall Street Reform and Consumer Protection Act on investment advisor oversight. In the report, the SEC staff recommends that Congress should tackle the issue.
Specifically, the staff recommended that Congress consider one of three approaches to strengthen the SEC investment advisor examination program. Those options included authorizing the SEC to impose user fees on SEC-registered investment advisors to fund their examinations, authorizing a self-regulatory organization (like FINRA) to examine, subject to SEC oversight, all SEC-registered investment advisors, or authorize FINRA to examine dual registrants for compliance with the law.
Some of Joel Greenblatt's 'magic formula' funds are now open to new investors. Formula Investing US Value Select
Barclays will pay a record $12 million fine and up to $94 million in compensation to United Kingdom investors for failing to provide adequate investment advice to thousands of customers who invested in two of its fixed-income funds.
The board of directors of Bridgeway Omni Small-Cap Value approved changing the fund's name to Bridgeway Omni Tax-Managed Small-Cap Value, on Jan. 18, 2011.
The board of trustees of Forward International Fixed Income
John Richardson, Julie Hollinshead, and Robert Crosby are no longer managers of Munder Micro-Cap Equity
Principal Global Investors is no longer a subadvisor for SEI Institutional World Equity Ex-US
The board of trustees has agreed to close Driehaus Active Income