A cautionary tale about the shareholders of Atlas Global Growth.
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The case of Atlas Global Growth
Golden West Financial has since been acquired by Wachovia
Whither Goes Atlas Global Growth?
As a result of Wachovia's acquisition of Golden West, most Atlas funds are merging into Wachovia's Evergreen Investments unit. Several of Atlas' funds had been subadvised in the past, meaning that the Atlas board hired outside management teams to run the funds. This commendable arrangement, which involved the board conducting arms-length analyses of managers and ultimately sharing revenues with them, is coming to an end. Atlas shareholders are now being asked to approve several fund mergers. They will likely become owners of various Evergreen funds in May.
Unlike most of its siblings, Atlas Global Growth is not merging into an existing Evergreen fund. Instead, the fund is being "reorganized" into a new fund to be called Evergreen Intrinsic World Equity Fund. An Evergreen subsidiary called MetWest Capital (not to be confused with the bond-shop of the same name) will manage the portfolio.
This is problematic for a few reasons. First, it takes the portfolio out of the hands of Oppenheimer Funds, a superb subadvisor that had run the fund for Atlas since its 1996 inception. Bill Wilby and his successor, Rajeev Bhaman, managed the Atlas Global Growth portfolio essentially as a no-load, near-clone of Oppenheimer Global
What is worrisome is that the fund's investment approach seems set to change as a result of the merger. Whereas Oppenheimer Funds ran this as a growth fund, MetWest is a value manager. Value-oriented funds have beaten growth offerings since 2000. Is this really the best time to be taking assets out of the hands of a growth investor? That's especially true because manager Bhaman is a patient, value-sensitive growth manager who has gravitated toward out-of-favor developed-markets blue chips such as Microsoft