Plus, Hussman shareholders get a big break, and more.
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On Wednesday afternoon, ClearBridge Advisors, an affiliate of Legg Mason LM that was formed in 2006 after the firm's acquisition of Citigroup Asset Management, announced some Legg Mason Partners funds' manager changes and a fund merger. The changes are big, but at least they will take place gradually.
Alan Blake, lead manager of Legg Mason Partners Large Cap Growth SBLGX since 1997, will retire at the end of October 2009. Peter Bourbeau, who was recently named a comanager of the fund after spending six years with the team, will take over. Scott Glasser, who has been a comanager (with Harry "Hersh" Cohen) on Legg Mason Partners Appreciation SHAPX since 1995, will join Bourbeau at Large Cap Growth while continuing to work on Appreciation.
Legg Mason Partners Equity Income Builder LMOAX also will merge with Legg Mason Partners Capital & Income SOPAX. Hersh Cohen, who has been with the firm since 1979 and is ClearBridge's chief investment officer, will run the combined fund, which will be called Legg Mason ClearBridge Equity Income Builder. Peter Vanderlee, who was previously responsible for Equity Income Builder, and Michael Clarfeld also will be a part of the newly formed team. Capital and Income's former management team, led by Robert Gendelman and including the fixed-income managers from Western Asset Management, will move off the fund, which got hit pretty hard in 2008's market collapse. This should be a good change for shareholders of Capital and Income, as Cohen's long-term performance has been notable.
Capital and Income's gain is Legg Mason Partners Appreciation's loss, though. After running the fund for 30 years, Cohen will gradually hand his lead manager responsibilities to Scott Glasser. Michael Kagan, who has built up a good record long-term record at Legg Mason Partners Equity SABRX, will join Kagan. Cohen will stay on the team through the end of 2009 to facilitate the management shift, which should provide continuity.
Huron Consulting's Woes Whack Funds
Huron Consulting Group HURN, a provider of operational and financial consulting services, saw its stock drop more than 65% this week on news of accounting issues related to misreported earn-out payments on acquisitions.The firm also announced that its chairman and CEO and its CFO are leaving and that it would restate the last three full years of financials. Interestingly enough, former partners of Arthur Andersen founded Huron after Enron's accounting scandal killed the Chicago accounting firm.
Many small-growth managers thought this firm, which specializes in giving legal and financial advice to distressed companies, would flourish in the financial crisis and recession. Now the question is who Huron will go to for advice.
Hussman Shareholders Get a Big Break
2009 has been a mixed bag for mutual fund expense ratios. Some firms, such Charles Schwab SCHW and Davis Selected Advisors, have cut fees. But others, including Vanguard, RS Funds, American Funds, and AllianceBernstein, have seen fees go up due to declining assets.