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Aberdeen to Buy Artio Global Investors

As part of Aberdeen's acquisition of Artio, some international fund managers to depart. Also, a management change on a T. Rowe Price health-care fund, Columbia hires Putnam's former asset-allocation head, and ClearBridge and Legg Mason Capital Management funds to merge.

Morningstar Fund Analysts, 02/14/2013

Artio Global Investors ART, parent of the advisor to a family of United States mutual funds, including Artio International Equity BJBIX, Artio International Equity II JETAX, Artio Total Return Bond JBGIX, and Artio Global High Income JHYIX, has agreed to be purchased by Aberdeen Asset Management, a global firm based in the United Kingdom. Aberdeen has more than $300 billion in assets under management and has made several acquisitions to diversify its fund lineup over the past 20 years.

The agreement, which is subject to approval by government agencies and shareholders of Artio Global Investors and Artio's mutual funds, calls for a purchase price of $2.75 per share. That's about 34% higher than Artio Global Investors' share price at the market's close on Feb. 13, just before the deal was announced.

Artio's share price has plummeted since shortly after it became independent from Swiss Bank Julius Baer in 2009. The stock was selling above $25 as late as April 2010.

The firm's international funds had attracted billions of dollars of assets in the mid-2000s owing to the stellar record of Artio International Equity since managers Rudolph-Riad Younes and Richard Pell took the reins in 1995. But the funds suffered a reversal of fortune, stringing together a multiyear stretch of poor relative performance that included 2012. Massive outflows from the two international funds reduced their combined asset base from a formidable $35 billion at the end of 2007 to roughly $2 billion now.

In response to the outflows, Artio Global Investors had shed employees over the past couple of years and had liquidated a small lineup of U.S. stock funds that had never attracted many assets.

The firm's bond funds have performed more impressively over the past five years, though Artio Global High Income did lag in 2010 and 2011. As a result, that fund and Artio Total Return Bond each contain more assets than either of the international funds. Global High Income has $2.9 billion in its coffers, while Total Return Bond has $2 billion.

According to the terms of the deal, the day-to-day managers of these bond funds will continue running them, joining Aberdeen. By contrast, Younes and Pell, who formally is listed as a manager on Total Return but is not its day-to-day manager, likely will be out, as Aberdeen personnel will take over the management of the international funds. The duo will continue to run the funds until the transaction officially closes, which Artio expects to occur by the end of this year's second quarter or early in the third quarter.

T. Rowe Price Health-Care Fund Manager to Depart
Kris Jenner of Gold-rated T. Rowe Price Health Sciences PRHSX will leave the firm on Feb. 15 to pursue other opportunities. Taymour Tamaddon, who has nine years of investment experience, will replace him. Since joining T. Rowe Price in 2004, Tamaddon has served as a health-care analyst covering hospital supplies, life sciences, and specialty pharmaceutical companies. He's also been a member of the investment advisory committee that oversees Health Sciences on a broad level.

Morningstar fund analysts cover more than 1,700 mutual funds and write regular commentary covering fund industry news, fund investing trends, picks, portfolio planning, international investing, and more.
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