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Fund Times

Rodriguez to Step Back from Managing Funds at FPA

Three-time Manager of the Year plans sabbatical in 2010.

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FPA's Bob Rodriguez plans to step back from day-to-day management of his funds  FPA Capital (FPPTX) and  FPA New Income (FPNIX). Rodriguez is a three-time winner of Morningstar's Manager of the Year Award.

Rodriguez says that he will take a one-year sabbatical beginning Jan. 1, 2010. At that time, his comanagers on the funds will assume lead manager roles. At FPA Capital, Dennis Bryan and Rikard Ekstrand will take the helm. Both were named comanager in 2007 but have worked with Rodriguez for more than a decade. At FPA New Income, Thomas Atteberry will become lead manager. He was named comanager in 2004.

Rodriguez said that after his one-year sabbatical he will return to the firm as an advisor and an analyst but will not be the lead manager. He did say that he will retain his ownership in the firm and the funds.

Rodriguez cited a number of reasons for stepping back. He said most of the credit crisis, which he has been thinking about for six years, is behind us. In addition, he said he doesn't want to "overstay" and manage the funds for too long. He also said the firm is deeper than it was once, and that makes it easier to step away.

What will he do on his sabbatical? Rodriguez says he aims to recharge and try to get a broader perspective on the economy and the credit crisis. If invited, he might even consider aiding the U.S. in its management of the crisis.

Will the way the funds are managed change? Rodriguez says they won't. He points out that Bryan and Ekstrand are the lead managers on some separate accounts and that they have very similar portfolios to FPA Capital. Both are steeped in the process. Bryan has been with FPA since 1993 and Ekstrand has been on board since 1999.

Both funds remain on the defensive. Capital is mostly in cash and energy stocks while New Income has a minuscule half-year duration. If the funds are still similarly situated come year-end, the managers will face the challenge of deciding when to become more fully invested. At FPA that has always been a matter of bottom-up and top-down analysis. Whether they get that call right or not will play a big role in investors' perceptions of the new lead managers.

Russel Kinnel does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.