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Ill Winds Blow at Tradewinds

Shareholders take note: Leader, key staff set to depart the firm. 

David Falkof, 03/16/2012

Earlier in the week, Tradewinds announced David Iben, its chief investment officer and co-president, would leave the firm at the end of June to join Vinik Asset Management. Now the firm revealed that several staff members are following him out the door.

Iben's departure is a major loss for the firm and shareholders of its funds. Iben helped create Tradewinds in 2006 when it was spun out of NWQ Investment Management. (Both are subsidiaries of Nuveen.) He was responsible for building up Tradewind's 14-member analyst team and devising a structure in which each fund could own only stocks that had been accepted onto a firmwide "approved list." Iben, who oversaw this list and was an integral member of the investment process, had a strong record running a separate account since 1999 and funds like Nuveen Tradewinds Value Opportunities NVOAX and Nuveen Tradewinds Global All-Cap NWGAX. His separate account, which was run similar to the Value Opportunities fund, returned 16.5% annualized gross of fees the past 10 years through Feb. 29, 2012, besting all large-cap blend funds. Firmwide assets grew to $34.3 billion as of Dec. 31, 2011.

Unfortunately, there is no natural successor at Value Opportunities and Global All-Cap because Iben managed both himself, with input from his analyst team. None of those analysts has the public record running funds Iben amassed. Tradewinds announced that two analysts, Joann Barry and Rowe Michels, will take over the Value Opportunities fund. Neither analyst has been a named manager on a Tradewinds fund, although Barry briefly comanaged DWS Gold & Precious Metals SGDAX from 1999 to 2001. Michels has no public track record managing a fund.

Emily Alejos and Drew Thelen will replace Iben on the Global All-Cap fund. They will also share the CIO role. Alejos and Thelen joined Tradewinds as equity analysts in 2007 and 2006, respectively. Alejos has comanaged Nuveen Tradewinds Emerging Markets NTEAX since its 2008 inception, but that fund's 22.1% annualized gain from its launch through March 14, 2012, trails more than three fourths of its diversified emerging-markets peers. Thelen has run Nuveen Tradewinds Small-Cap Opportunities NTSAX since its 2011 launch. Alejos' and Thelen's public track records are too short to inspire much confidence.

Meanwhile, Constance Lawton, who shared the co-president title with Iben, will become the firm's sole president.

Iben will be taking several key members of Tradewinds investment ranks with him. Portfolio managers Alberto Jimenez Crespo, Gregory Padilla, and Isabel Satra will all be leaving in June. Crespo comanaged Nuveen Tradewinds International Value (NAIGX) since 2009, which will now be solely managed by Peter Boardman. Crespo, Iben, and Padilla also have comanaged Nuveen Tradewinds Global Resources (NTGAX) since 2006, but the fund’s new portfolio manager has not been announced. Satra and Iben have comanaged Nuveen Tradewinds Global Flexible Allocation (NGEAX) with Michael Hart since 2010. Hart will continue to manage that fund and will be joined by Ariane Mahler, who has worked as an analyst and portfolio manager at Tradewinds since 2007. Lastly, Kassim Gaffar, Tradewinds' associate director of research, will also join Iben. Gaffar has already left the firm.

Tradewinds previously suffered a major departure in mid-2009 when Paul Hechmer left to build his own asset-management firm, del Rey Global Investors. Hechmer, who worked with Iben at NWQ and helped found Tradewinds, successfully managed Nuveen Tradewinds International Value and its NWQ predecessor for seven years. When Hechmer left, analysts Peter Boardman and Alberto Jimenez Crespo took over. Iben was around to smooth that transition, but now his departure and the loss of several other managers significantly lessens the Tradewinds lineup's appeal.

Iben is joining hedge fund firm Vinik Asset Management. The firm was founded by Jeffrey Vinik, who ran Fidelity Magellan FMAGX for four years in the 1990s.

David Falkof is a mutual fund analyst at Morningstar.

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