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Calamos Hires Ex-Janus CEO

Columbia files to launch active ETFs, Eagle secures new team, the SEC backs off money fund reforms, and more. 

Rob Wherry, 08/23/2012

Calamos Investments CLMS has hired Gary Black, former CEO of Janus, as its global co-chief investment officer. Black will join the firm's investment committee and will oversee portfolio management, research, trading, and risk management. Black will share those responsibilities with firm founder John P. Calamos Sr. At the same time, Nick Calamos will step back from his role as president of investments and co-chief investment officer. Nick Calamos will remain an advisor to the firm and will continue to serve on its board of directors.

Black is best-known for his stint at Janus Capital Group JNS, first as its president and then as CEO between 2006 and 2009. His stint at Janus was positive, albeit marked with controversy. He moved the firm away from its star manager system to one that was more collaboration-based, altering the firm's compensation plan along the way. That led to a string of high-profile managers heading for the exits.

After leaving Janus, Black founded his own firm, Black Capital. That firm's investment team, which helped run a long/short strategy, will become part of Calamos, too. However, the team will work out of an office located in New York City. Black is expected to spend most of his time in the firm's Naperville, Ill., headquarters.

This is the second deal for Calamos in as many months. The firm announced in July 2012 that it had hired a three-person value equity team from American Independence Capital Management.

Columbia Set to Launch Active ETFs
Columbia is moving deeper into the actively managed exchange-traded fund market. The firm, which last year acquired Grail Advisors and its five active ETFs, recently filed with the SEC to launch an additional 17 funds, including 10 fixed-income offerings. Twelve of the new ETFs will be similar to existing Columbia funds like Silver-rated Dividend Income LBSAX, which is in the top decile of the large-value peer group during the trailing five-year time period through Aug. 23, 2012.

According to the filings, the funds will post their holdings on a daily basis. The holdings and weightings of the ETFs may slightly differ from their open-ended cousins due to trading dynamics. One key question mark is fees; the filings don't disclose whether the new ETFs will charge fees lower than their open-end cousins.

Columbia is trying to build off the beachhead it created when it bought Grail Advisors, an early pioneer in actively managed ETFs. The Grail funds, which now trade under the Columbia name, have a combined $25 million in assets. Industrywide, active ETFs have struggled to attract assets. PIMCO Total Return ETF BOND is the one exception: It has gathered $2.5 billion since its launch earlier this year. The Grail acquisition, though, did provide Columbia an advantage: It makes the firm one of the few to have already passed through the regulatory hoops to gain permission to launch active ETFs.

The move puts Columbia on a different course from some of its competitors. Russell recently announced it would liquidate all but one of its ETFs. FocusShares announced a similar move earlier this month, and Direxion said it would close nine of its triple-leverage ETFs in September 2012. The liquidated ETFs, though, were passively managed.  

SEC Throws in the Towel on Additional Money Market Reforms
After spending two years developing additional money market regulations, the SEC has released a statement declaring they will not move forward. After months of delays, three commissioners have confirmed they would not vote in favor of the proposal, halting the reform process and avoiding a public vote. According to the statement, the proposal would have included two alternative steps, a floating NAV or capital buffers.

In her statement, chairman Mary Schapiro urged other policy makers to continue the fight for reform. The Financial Stability Oversight Council, a body created from the Dodd-Frank act, is likely to take up the cause, potentially classifying money markets funds as systemically important, which would require stricter oversight of the funds.

For now, this is a big win for money market giants such as JP Morgan JPM, Fidelity, Schwab SCHW, and Federated Investors FII. Federated has been one of the most vocal opponents of additional reforms, with CEO Chris Donahue indicating the firm would sue the SEC over proposed regulations. As other players have exited the low-margin money market business, Federated has upped its stake, purchasing money market assets from several competitors, including Fifth Third FITB and Performance Funds in 2012. Money market funds account for nearly half the firm's revenue, meaning additional reforms would likely be a threat for the firm's bottom line.

PIMCO Switches Performance Benchmarks
PIMCO is switching the performance benchmarks at several of its funds. The Silver-rated PIMCO Fundamental IndexPLUS PIXAX and PIMCO EM Fundamental IndexPlus PEFPX will still be constructed using the fundamental indexes developed by Rob Arnott, the founder of Research Affiliates. However, Fundamental IndexPlus will now seek to exceed the returns of the S&P 500, while the EM Fundamental Index Plus will try to beat the results of the MSCI Emerging Markets Index.

In addition, PIMCO Inflation Response Multi-Asset PZRMX may now invest up to 25% of assets in gold, up from its former maximum of 15%.

Invesco Managers Step Down
Peter Ehret has left Invesco IVZ. Ehret served as lead portfolio manager for Invesco High Yield AMHYX and was the head of high-yield investments at the firm. Colleagues Darren Hughes and Scott Roberts will continue as comanagers on the fund and will assume Ehret's portfolio management duties throughout the firm. In addition, Dean Dillard is no longer listed as a portfolio manager on Invesco Global Health Care GGHCX.

Eagle Secures New Management Team
Chuck Schwartz, Betsy Pecor, Matt Spitznagle, and Matt McGeary have officially joined Eagle Asset Management. Schwartz, Pecor and McGeary will be named managers on Eagle Mid Cap Stock HMCAX on Oct. 1, 2012. The managers previously worked at Sentinel Investments. Their departures caused Sentinel to rethink its compensation plan. Earlier this month the firm announced certain managers would now be eligible for equity ownership in the firm.

Etc.

Walter Riddell will retire from his position as comanager at Morgan Stanley Global Franchise MSFAX and Morgan Stanley Institutional International Equity MSIQX at the end of 2012.

Hal Ratner is no longer listed as part of the management team on Transamerica's retail asset allocation funds. Ratner is chief investment officer of Europe for subadvisor Morningstar Associates (a wholly owned subsidiary of Morningstar, Inc. MORN). Three other current portfolio managers remain on the funds.

The board of trustees at Northern Trust NTRS approved the reorganization of six of the firm's Northern Institutional Trust equity funds and three institutional fixed-income funds. The funds will merge into an existing Northern Trust fund at the end of October or early November.

Touchstone Emerging Markets Equity II TFEMX will merge into Touchstone Emerging Markets Equity TEMAX. The strategies and management for both funds are identical.

Kara Murphy was added as a comanager on SunAmerica Focused Multi-Asset Strategy FASAX and SunAmerica Focused Balanced Strategy FBAAX. Murphy joined SunAmerica in 2006 and also serves as director of research at the firm.

Transamerica filed to launch the Transamerica Income & Growth and Transamerica Enhanced Muni open-end funds.

Thomas Cole is now a portfolio manager on Transamerica Select Equity, joining Jerrold Senser and Thomas Wenzel.

Neuberger Berman filed to launch the Neuberger Berman Dynamic Real Return fund. According to the filing, the fund will invest in inflation-linked bonds, junk bonds, MLPs, REITs, commodities, and equities. Thanos Bardas and Andrew Johnson will manage the fund. The pair are also on the management team of Neuberger Berman Core Bond NCRAX and Neuberger Berman Strategic Income NSTAX.

CMG Absolute Return Strategies CMGTX no longer lists Howard Capital Management, AIFS, or Anchor Capital Management as managing assets for the fund. Traub Capital and Scotia Partners remain as subadvisors.

Rob Wherry is a mutual fund analyst with Morningstar.
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