Meridian shores up its ranks and more.
Fifth Third Bancorp FITB is exiting the retail mutual fund business in order to focus on institutional money management. Over the last few weeks Fifth Third Asset Management, a division of the Cincinnati-based bank, has announced two deals that will send its mutual funds and money market funds to Touchstone Investments and Federated, respectively. Fifth Third had almost $8 billion in these funds. Terms of the deals weren't disclosed.
Touchstone will acquire 16 funds from Fifth Third and merge most of them into the firm's existing lineup. Touchstone, which uses subadvisors on its funds, will in turn hire Fifth Third's management teams to run some of those funds. Another four funds--Fifth Third Dividend Growth FSPIX, Fifth Third Equity Index KNIEX, Fifth Third Small Cap Growth KNEEX, and Fifth Third Structured Large Cap Plus KNVEX--will be liquidated. Shareholders in those offerings will have the opportunity to move into Fifth Third funds before the deal closes. Touchstone has used acquisitions like this one to grow its asset base. Old Mutual shareholders recently signed off on Touchstone's acquisition of 17 Old Mutual funds. Touchstone now has around $13 billion in assets under management.
Federated FII will swallow up four of Fifth Third's money market funds that hold around $5 billion in assets. Federated is one of the largest players in the money market space with $285 billion in assets in these types of funds. The Fifth Third money market funds will be merged into existing Federated offerings that have similar mandates.
GuideStone Fires Tradewinds as Subadvisor
After a tumultuous month for Tradewinds Global Investors, the GuideStone Funds removed Tradewinds as a subadvisor on GuideStone Funds International Equity GIEYX. The fund has 10 other subadvisors managing its assets, and they remain in place. In March 2012, David Iben, Tradewinds' president and chief investment officer, announced that he would leave the firm at the end of June and would be taking three analysts with him. Iben played a critical role in building the firm and overseeing its investment process, so his departure is a major loss. GuideStone had hired as subadvisors two Tradewinds managers, Emily Alejos and Michael Hart, in March 2011 to manage a portion of the fund’s assets. While Alejos and Hart remain at Tradewinds, there are broader concerns about the firm's stability following Iben's announcement. By the end of March 2012, two of the firm's largest funds, Negative-rated Nuveen Tradewinds Value Opportunities NVOAX and Negative-rated Nuveen Tradewinds Global All-Cap NWGAX, had each lost roughly one fourth of their assets to investor redemptions.
Meridian Rehires Former Staffer
Aster Investment Management, the advisor for the Meridian Funds, announced it rehired Kevin O'Boyle to help fill the void left by the death of firm founder, Richard Aster. O'Boyle, who previously ran Meridian Value MVALX for almost nine years before leaving in 2004 to start his own shop, will not be a named manager on any of the three Meridian funds. Instead, he will serve in a broader research capacity, especially on Meridian Growth MERDX, which was Aster's main fund before his passing. While the move does shore up the firm's ranks, it doesn't completely answer some of the questions about the future of Meridian Growth since O'Boyle's position isn't permanent (at least not yet) and his past experience was on Meridian Value.
Manager Changes at Chase Growth
Chase Investment Counsel, the Charlottesville, Va.-based advisor for Bronze-rated Chase Growth CHASX, announced that Peter Wood, a longtime analyst at the firm and recently a named manager on the fund, will retire at the end of April 2012. The firm also announced it has ended a six-month long search for a new chief investment officer with the hiring of Edward Painvin. Painvin previously worked at Allianz-RCM on several of the firm's large cap growth strategies. In addition to his broad firmwide and fund manager roles, Painvin will also help with covering technology companies, a sector that Wood was responsible for before his retirement.
T. Rowe Price Manager Retires
Rob Gensler, manager of T. Rowe Price Global Stock PRGSX and T. Rowe Price Institutional Global Equity TRGSX, is retiring. Dave Eiswert is taking over as manager at the funds. Eiswert, who has managed T. Rowe Price Global Technology PRGTX for three years, will step down from that fund to assume his new duties. He'll be succeeded at Global technology by Josh Spencer, a portfolio manager who joined T. Rowe seven years ago and has supported Eiswert as a member of Global Technology's Investment Advisory Committee.
Sextant Growth Gets New Manager
Saturna Capital, the advisor for the Sextant funds, announced it hired Paul Meeks to manage the $25 million Sextant Growth SSGFX. Meeks has a colorful history in the mutual fund world. He was previously the manager of Merrill Lynch Internet Strategies, a fund that launched in 2000 at the height on the technology boom and was merged away a year later.
Hancock Shutters Funds
John Hancock announced it will liquidate several index funds that were used as underlying offerings in some of its asset allocation products. The funds will be replaced by a strategic equity allocation fund that will allow Hancock managers to adjust their asset mix more dynamically. The change will impact the firm's Lifecycle target-date funds, among other products. Those offerings typically held 30% to 40% of assets in index funds, which helped keep costs in check. They will now take on a more actively managed bent, while maintaining a similar cost structure.
Neil Burke and Richard Raczkowski are stepping down from Loomis Sayles Intermediate Duration Bond LSDIX, which they comanaged since 2005. Burke and Raczkowski will be replaced by Christopher Harms, who previously comanaged Mainstay Income Builder MTOIX and Mainstay Intermediate Term Bond MTMIX for about six years, and Kurt Wagner, a vice president and portfolio manager at Loomis Sayles. Comanager Clifton Rowe will remain onboard Intermediate Duration Bond and at Loomis Sayles Limited Term Government and Agency NECLX, but he is relinquishing his role at Loomis Sayles Inflation Protected Securities LSGSX. John Hyll is also no longer a manager on both funds. The firm announced Elaine Kan, Kevin Kearns, and Maura Murphy will take over Inflation Protected Securities. Harms and Wagner will also take the helm at Limited Term Government and Agency.
Richard House and Agnes Belaisch, who have managed Columbia Absolute Return Emerging Markets Macro CMMZX since its 2011 inception, are stepping down. They'll be replaced by Nicholas Pifer and Jim Carlen, who serve on the firm's Global Rates and Currencies research team. Pifer has managed several other funds for Columbia, including Columbia Global Bond AGBIX since 2000 and Columbia Emerging Markets Bond RSMIX since 2006. Carlen joined Columbia Emerging Markets Bond as a comanager in 2008.
AQR is launching five new alternative strategy funds that will be available to investors in early July 2012. Three defensive equity strategies--AQR U.S. Defensive Equity, AQR International Defensive Equity and AQR Emerging Defensive Equity--will be managed by AQR portfolio managers Jacques Friedman, Lars Nielsen, Andrea Frazzini and Hoon Kim. Two commodity funds--AQR Risk-Balanced Commodities Strategy and AQR Risk-Balanced Commodities Strategy LV--will be managed by Brian Hurst and Yao Hua Ooi. That duo helps run AQR Managed Futures Strategy AQMIX
ING is seeking shareholder approval to revamp ING American Funds Bond Portfolio IABPX, which currently invests 100% of assets in a master fund housed at American Funds and run by subadvisor Capital Research and Management. ING hopes to turn management of the fund's assets over to an in-house team including CIO for fixed income Christine Hurtsellers and portfolio managers Matthew Toms and Michael Mata. The trio manages several ING portfolios, including ING Intermediate Bond Portfolio IPIIX.
Hartford Advisers ITTAX, which has struggled with outflows since a disappointing performance in 2008, will assume a new name, Hartford Balanced, on April 30, 2012. Steve Irons and Peter Higgins, who have managed the portfolio's equity sleeve since 2005, are stepping down. Wellington Management's Karen Grimes, who has led Hartford Value HVFAX and MassMutual Select Fundamental MFUAX since 2007 and 2008, respectively, will take over. John Keogh, the manager of the fund's bond sleeve, will remain on board.
Bridgeway has asked shareholders to approve the merger of Bridgeway Micro-Cap Limited BRMCX into Bridgeway Ultra-Small Company BRUSX, which has a similar mandate and management team. The firm foresees a fee cut of 37 basis points for holders of the microcap fund.
Old Mutual is seeking shareholder approval to sell Old Mutual Heitman REIT OARTX to Fundvantage. Expenses for most shareholders shouldn't change, though the fund would eliminate its cheapest Institutional share class.
Pioneer is adding a new fund to its multisector bond line-up with the launch of Multi Asset Ultra Short, which will invest in domestic and international floating-rate securities. Charles Melchreit, Seth Roman and Jonathan Sharkey will lead the effort. The trio currently manages Pioneer Multi-Asset Floating Rate MAFRX.
Patricia Perez-Coutts has departed from the Canadian investment management shop AGF Management Ltd., where she led the team subadvising U.S.-domiciled Touchstone Emerging Markets Equity TEMAX and Touchstone Emerging Markets Equity II TFEMX. Her comanager at the funds, Stephen Way, will remain onboard.
Kevin Earley and Brent Mellum, comanagers of Nuveen Mid Cap Value FASEX and Nuveen Large Cap Value FASKX, are no longer running those funds. They'll be replaced on the mid cap offering by Karen Bowie and David Chalupnik. Bowie has run Nuveen Small Cap Value FSCAX since 2005, while Chalupnik has comanaged Nuveen Large Cap Select FLRAX since 2003. At the large cap value fund their roles will be filled by Cori Johnson, Gerald Bren and Derek Sadowsky. Bren and Johnson have managed Nuveen Dividend Value FFEIX since 1994. (Sadowsky is also a comanager on that offering.)
River Road has filed to add a sixth fund to its line-up. ASTON/River Road Dividend All Cap Value II will follow a strategy similar to >ASTON/River Road Dividend All Cap Value ARDEX, which is closed to new investors. The new fund will focus on large cap dividend payers that are also part of its sibling's portfolio. River Road followed a similar strategy when ASTON/River Road Small Cap Value ARSIX closed, launching ASTON/River Road Select Value ARIMX in 2007. That fund invests in its sibling's largest names and has generated similar returns.The board of trustees at Wells Fargo approved the merger of Wells Fargo Advantage Strategic Large Cap Growth ESGAX into Wells Fargo Advantage Large Cap Growth STAFX. The funds have been managed by the same team and according to the same strategy since July 2011.
Mutual fund analysts David Falkof, Shannon Kirwin, and Rob Wherry contributed to this report.