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Fund Times: LBO Frenzy Impacts Fund Returns

Plus, news on new Turner funds, Causeway's emerging-markets fund, and more.

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The recently announced buyouts of copper producer  Phelps Dodge (PD) and REIT giant  Equity Office Properties Trust  (EOP) have helped out a few funds, as leveraged buyouts can have a dramatic impact on a firm's stock price and, thus, on fund returns.

The day Freeport-McMoRan bid for Phelps Dodge the stock rose nearly 30%, and Equity Office Properties saw a 7% increase after the Blackstone Group made its offer. Funds that benefited from the Phelps deal include Morningstar Fund Analyst Picks  Brandywine Fund (BRWIX) and  Fairholme Fund (FAIRX), which both had sizable positions in Phelps Dodge prior to the buyout being announced. So did  Jennison Natural Resources (PGNAX) and  Neuberger Berman Partners (NPRTX). Predictably, funds that have benefited from the more modest stock price move at Equity Office include real-estate-oriented funds, such as  Fidelity Real Estate Investment (FRESX) and  Cohen & Steers Realty Shares (CSRSX).

Lawrence Jones has a position in the following securities mentioned above: BRWIX. Find out about Morningstar’s editorial policies.

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