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Fund Times: Chicago Consortium Acquires Nuveen

Plus: American Century fills a gap, T. Rowe's latest venture, and more.

Morningstar Analysts, 06/25/2007

Asset manager Nuveen Investments JNC is going private. A group led by Madison Dearborn Partners plans to buy the firm for $5.75 billion, provided that no other bidders offer competing proposals by July 19. That price offers a nearly 20% premium to Nuveen's open-market value immediately before the deal. During a conference call to discuss the deal, Nuveen president John Amboian noted its key drivers. Among them: Nuveen's board found the valuation a compelling deal for its shareholders, and the company has determined that it may be able to grow faster once it is privately held.

New CIO at American Century
Stephen J. Lurito will join American Century in July as CIO of the firm's U.S. growth equity group. Lurito brings 22 years of industry experience to the newly created position at American Century, most recently serving as CIO at MUUS Asset Management LLC, the manager of both private equity investments and a hedge fund. Before that, Lurito spent the majority of his career at asset manager Warburg Pincus, both before and after its acquisition by Credit Suisse CS. Lurito has growth credentials, as he was a coportfolio manager of Warburg Pincus Emerging Growth (now known as Credit Suisse Mid-Cap Core CUWAX) from 1990 to 2001.

Lurito's hiring marks another step in recent efforts of new CEO Jonathan Thomas and head CIO Enrique Chang to bring stability to American Century's ranks. Thomas and Chang have focused on hiring industry veterans to lead various investing divisions after some key executive departures in late 2006 and early 2007.

Harbor Large Cap Value Gets New Subadvisor
Cohen & Steers Capital Management is in as the new manager of Harbor Large Cap Value HRLVX. The firm replaces Armstrong Shaw Associates, manager of the fund since September 2001. The Harbor Funds board made the change after Armstrong Shaw turned in lackluster results in recent years--the fund's 9.3% annualized gain for the five years ended June 19, 2007, trailed 85% of its large-value rivals.

Cohen & Steers' Richard Helm becomes Large Cap Value's lead manager. A veteran with more than 20 years' experience, Helm will employ a cash-flow-oriented approach, seeking firms with strong dividend growth. He'll also work initially to raise the fund's stock holdings from about 35 currently to between 60 and 80. He's had success with this approach in the past at Principal Inv Equity Income I PQIAX from 2001 to 2005 and Cohen & Steers Dividend Value DVFAX since 2005.

T. Rowe Price Ventures Deeper Into Emerging Markets
T. Rowe Price will launch a new Africa and Middle East-focused fund later this year. Chris Alderson, current manager of T. Rowe Price Emerging Markets Stock PRMSX, will lead it. Alderson has built plenty of experience and a strong track record buying companies in developing economies during his 12-year tenure on that fund (which he'll continue to lead). Even so, this fund brings T. Rowe Price and Alderson further into so-called 'frontier' markets--some of the most dangerous but fastest-growing countries in the world.

Royce Proposes Greater Flexibility for Several Offerings
Royce & Associates is asking shareholders for a lot more leeway in several funds. The firm proposes eliminating foreign securities investment restrictions in eight Royce funds. Other less-sweeping changes include allowing holdings of a particular issue to exceed 10% of that stock's outstanding shares in the Pennsylvania Mutual PENNX offering and allowing Royce Premier RYPRX, Low-Priced Stock RYLPX, and Total Return RYTRX to own asset-management companies. Shareholder votes will be tallied at a special meeting on Sept. 6.

Fidelity Nordic Shareholders Reject Merger
The Fidelity Nordic FNORX fund is reopening. Fidelity had closed the fund to new investors, proposing to merge the Scandinavia-focused offering's assets into Fidelity Europe FIEUX. But only a simple majority of voting shareholders approved the measure, instead of the two thirds required. Fidelity will continue running the fund in its existing form. 

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