Fund Times: Big Changes at the Top for BlackRock
Plus, news from Third Avenue, Fidelity, Longleaf, and more.
BlackRock announced today that Keith Anderson, one of its cofounders, will leave the firm in March 2008 and will likely start his own investment fund. Most recently, Anderson has served as BlackRock's vice chairman and its global chief investment officer for fixed income. Scott Amero, an 18-year employee of BlackRock, replaces him in both roles. Amero was already co-leader (with Anderson) of BlackRock's fixed-income efforts. Joining Amero as a new co-head of fixed-income portfolio management is Peter Fisher, chairman of BlackRock Asia. And, following the company's tradition of team management and keeping up with its growth, BlackRock will add four other veterans to its fixed-income leadership team.
We think BlackRock will make this transition smoothly, though there's no denying that Anderson's departure represents a great loss of talent. But BlackRock is offering just what investors could hope for in such a situation. The remaining team is extremely strong--more than 30 of its over 100 portfolio managers have been employees of the company for 10 years or more. All things considered, BlackRock funds shareholders' money is still in very good hands.
Third Avenue Creates Opportunity by Re-opening Foreign Fund
In a category where good, still-open funds are tough to come by, Third Avenue is giving investors a break. It is reopening foreign small/mid-value fund Third Avenue International Value (TAVIX) on Dec. 20, 2007 (after the fund's 2007 distribution). Similar to the logic driving Longleaf Partners' reopening--discussed below--Third Avenue seeks to raise cash to capitalize on newly created opportunities from financial markets' turbulent summer and fall without selling other fund holdings. This fund, managed by Amit Wadhwaney since its 2001 inception and now about $2.3 billion in size, previously closed in mid-2005 after significant inflows. So it's likely that this action is temporary.
In an added twist, Third Avenue's press release mentions new opportunities that the team has found in markets it previously left untouched. For example, investors here shouldn't be surprised to see stocks from countries such as Poland, Thailand, or South Korea, to name a few, joining the portfolio. Third Avenue recently opened a Singapore office to bolster its international capabilities.
Templeton Funds See Manager Shuffle
Murdo Murchison, the most-senior comanager of world-stock fund Templeton Growth (TEPLX), is leaving the fund to return to Scotland, though he will continue to work for Templeton in a consultant role. Under Murchison's watch, this flagship fund, which now holds nearly $40 billion in assets, returned 10% annually from 2001 through November 2007. That performance was significantly better than the fund's typical competitor and came with less volatility. Cindy Sweeting, now Templeton's director of research, replaces Murchison, joining comanagers Lisa Myers and the recently added Tucker Scott. Sweeting had previously comanaged smaller-cap international funds for Templeton.
Dale Winner is also leaving Templeton. An employee there since 1995, he had just become a comanager of Templeton World (TEMWX). Templeton World is now managed by the same team as Templeton Growth, including Sweeting.
Fidelity's Latest Manager Change
In a quiet year for Fidelity manager changes--and we realize that that is a highly relative statement--a significant one has just been announced. Up-and-coming manager Darren Maupin, who ran international equity portfolios for a wide swath of Fidelity funds, is leaving the firm. Maupin managed or comanaged parts of Fidelity Aggressive International (FIVFX), Fidelity Advisor International Capital Appreciation (FIATX), Fidelity Advisor Global Capital Appreciation (FGEAX), and the international portfolios of the firm's Asset Manager group. Victor Thay stays on as comanager and is responsible for U.S.-invested assets at Advisor Global Capital Appreciation.
Replacing Maupin as manager or comanager on the three aforementioned funds is Sammy Simnegar, who joined Fidelity in 1998 and became a member of its Emerging Markets team in 2003. Fidelity won't replace Maupin with a named comanager for its Asset Manager funds. Rather, Fidelity will split the international portfolio into a variety of sector-specific sleeves, similar to the model employed on the domestic side.
Longleaf Partners Opens Fund Just a Bit Further
We wrote in mid-November that Longleaf Partners (LLPFX) was temporarily reopening to current shareholders. Its managers--winners of Morningstar's Domestic-Stock Manager of the Year award in 2006--reason that, by investing new cash in stocks whose prices fall far below the managers' estimates of their fair values, they will lower the portfolio's overall price/fair-value ratio and increase the opportunity for greater future returns. Longleaf notes that the reopening has been a success in recent weeks, but that with further investments, it can reduce the fund's price/fair-value ratio even more. So it's now opening the fund to shareholders of the firm's two other funds, Longleaf Partners International (LLINX) and Longleaf Partners Small-Cap (LLSCX). Longleaf plans to close the fund when it can no longer reduce that ratio via new investment. In the meantime, however, the team says it may reopen the fund to new investors, too.
Disclosure: Morningstar licenses its indexes to certain exchange-traded product providers, including Barclays Global Investors (BGI), First Trust, Claymore, and Merrill Lynch, for use in exchange-traded products. These exchange-traded products are not sponsored, issued, or sold by Morningstar. Morningstar does not make any representation regarding the advisability of investing in the exchange-traded products that are based on Morningstar indexes.
Andrew Gunter does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
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