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BlackRock Equity CIO Chris Leavy Takes Medical Leave

Paul Davis departs Charles Schwab Investment Management, a manager change at Ariel, and a foreign currency manager at JP Morgan exits.

Morningstar Fund Analysts, 06/20/2013

Last week, BlackRock's BLK Chris Leavy, who is the firm's chief investment officer of its fundamental stock unit in the Americas, left BlackRock on a medical leave of unspecified length to address several treatable health issues, according to a firm spokeswoman. Leavy, 42, suffers from diabetes and a related cardiovascular condition and has been advised to focus full-time on his health issues before coming back to work.

Leavy joined BlackRock in 2010 from OppenheimerFunds. Since that time, he has worked to better the performance of BlackRock's actively managed stock funds.  Some of his most significant moves have involved hiring several big-name portfolio managers, including Bartlett Geer and Lawrence Kemp. He also has assumed oversight of the firm's large-cap stock funds that previously had been overseen by Bob Doll, who now is with Nuveen.

As part of Leavy's leave of absence, he has stepped down--at least, temporarily--from the four funds he has comanaged, including the $880 million BlackRock Large Cap Value MALVX and the $1.7 billion BlackRock Large Cap Core MALRX. In Leavy's absence, longtime comanager Peter Stournaras will manage the funds solo. Meanwhile, Leavy's CIO responsibilities will be handled during his absence by Quintin Price, the global head of BlackRock's actively managed strategies. Leavy reports to Price.

Charles Schwab Portfolio Manager Departs to Start Own Firm
Management changes continue to occur at Charles Schwab Investment Management, where Paul Davis, who had helped to manage the firm's roughly $5.6 billion in disciplined active equity products, is leaving the firm to start his own company.

Working alongside comanager Jonas Svallin, Davis had been at the helm of a raft of actively managed funds, including Schwab Core Equity SWANX. Davis stepped down on June 14. To replace Davis, Schwab has promoted Wei Li, whom the firm hired in 2012, to become a comanager alongside Svallin.

Charles Schwab Investment Management, the asset management arm of the Schwab brokerage, has been in a rebuilding mode in recent years, bringing in a number of outside investment professionals in response to the fallout from the financial crisis and allegations that it made misleading statement regarding the YieldPlus Fund. Those allegations culminated in a $118 million settlement with the SEC. While only the 45th-largest provider of long-term mutual funds and 10th-largest provider of exchange-traded funds, Schwab holds considerable sway in the industry due to the popularity of its brokerage platform with independent financial advisors.

Personnel changes at the firm have occurred at all levels of the organization. In 2010, Marie Chandoha joined as chief investment officer and later added the chief executive officer title. In 2011, Omar Aguilar was added to head both passive and active equities. Agnes Hong, who joined the firm in 2009, leads the passive equity team, including both index mutual funds and ETFs. Larry Mano, who has been a listed portfolio manager on several Schwab index funds as far back as 1999 and had worked alongside Davis, announced his retirement in February.

Ariel Focus Comanager Focuses His Efforts Elsewhere at the Firm
Tim Fidler has stepped back as a comanager of Ariel Focus ARFFX, leaving Charlie Bobrinskoy as the $50 million fund's lone manager. Both Fidler and Bobrinskoy, Ariel's director of research, have managed the fund since its 2005 inception.

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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