Fund Times: Longleaf Partners International Loses a Veteran Manager

Andrew McDermott, who has been managing  Longleaf Partners International (LLINX) since its 1998 inception along with Longleaf stalwarts Mason Hawkins and Staley Cates, is leaving advisor Southeastern Asset Management this autumn. Hawkins and Cates will remain as the fund's managers.

The London-based McDermott has played a major role on the International fund. He is listed as a manager only on that fund--unlike Hawkins and Cates, who are listed on all three Longleaf Partners funds. But Hawkins and Cates have been closely involved in the International fund's management as well. In fact, Longleaf International shares several holdings with the Longleaf domestic funds they manage,  Partners (LLPFX) and  Partners Small Cap (LLSCX). Meanwhile, the main analysts on International, Scott Cobb and Ken Siazon, will take a larger role on the fund, though they have not been named comanagers at this time. Cobb, based in London, has been promoted to head of European research, and Siazon, based in Singapore and Tokyo, to head of Asian research. Cobb and Siazon each joined Southeastern Asset Management in 2006 after a number of years at other firms.

McDermott will officially be taken off Longleaf International as of Aug. 31. A Longleaf spokesperson says, though, that in an independent capacity he will continue to work with Southeastern Asset Management in their efforts to help shape the pending merger between Japanese insurers NipponKoa and Sompo. (Southeastern is a major shareholder of both firms.) He may also do similar work in conjunction with Southeastern in the future.

The spokesperson said that Southeastern has known of McDermott's desire to leave London and pursue other career directions for several years and had hired analysts and groomed them with that in mind but had thought McDermott's departure would not occur for some time yet. Key reasons for the acceleration of those plans, according to the spokesperson, were the importance and complexity of the NipponKoa/Sompo merger and McDermott's desire to focus his attention both on that issue and, more broadly, on efforts to improve corporate governance in Japan.

Vanguard to Launch Bond Sector Funds
Vanguard this week said it would launch seven new fixed-income index funds and ETFs before the end of the year. The new offerings will include a mortgage-backed securities fund, three government-bond funds, and three corporate-bond funds. All of the funds will track Barclays Capital indexes. The government and corporate funds will come in short, intermediate, and long durations. And the expense ratios for the funds and ETFs will be 0.15%. The traditional open-end funds will have a minimum investment of $1 million, so Vanguard is really targeting these new offerings to institutional investors and financial advisors. See this story for additional details.

Vanguard's High-Yield, Long-Term Muni Funds Get New Manager
In other news at Vanguard, the family's head of its municipal money market and municipal-bond groups, Chris Alwine, will take over the  Long-Term (VWLTX) and  High-Yield Tax-Exempt (VWAHX) funds from Reid Smith, who left the firm recently for personal reasons. Smith, who joined Vanguard in 1992, has been a manager on the high-yield fund since 1996 and on the long-term fund since 2007. Alwine has been with Vanguard for 19 years and has been running fixed-income funds for the firm for 13 years. He was last listed as a retail fund manager on a couple of Vanguard's single-state muni-bond funds from 2000 to 2002, according to Morningstar data.

Morgan Stanley/Van Kampen Funds Reopen after Star Manager's Departure
 Morgan Stanley (MS)reopened some once very popular and successful world stock funds to new investors on Aug. 10. The firm reopened  Van Kampen Global Franchise ,  Morgan Stanley Global Franchise ,  Van Kampen Global Value ,  Morgan Stanley Global Value , as well as similar funds domiciled in the U.K., Australia, and Luxembourg.

Morgan Stanley says that between asset depreciation and outflows, due in part to the departure of star manager Hassan Elmasry and his team at the end of April, the strategy's total assets under management in this strategy, including retail and institutional assets, have dropped to $5 billion from $12 billion.

Old Mutual, Laudus Rosenberg Join the Reorg Party
Old Mutual and Laudus Rosenberg recently announced a batch of mergers, joining a number of fund families that have reorganized their fund lineups as their assets bases have declined.

Old Mutual Focused (OAFCX) will absorb  Old Mutual Growth . Focused is about 75% smaller than Growth and has a very different strategy. Growth is a diversified mid-cap growth fund and Focused a concentrated large-blend fund. In addition, Old Mutual Columbus Circle Tech & Communications   will also merge with Focused. The firm is liquidating Old Mutual Analytic Global .

Meanwhile Laudus Rosenberg said it would streamline its fund lineup. The family will liquidate Laudus Rosenberg US Large Capitalization  and  Laudus Rosenberg Long/Short Equity  on Oct. 22 according SEC filings.

The firm announced in the same filing that later this year that  Laudus Rosenberg US Small Capitalization  and Laudus Rosenberg International Equity  will be merged into other funds. The Small Cap fund will combine with Laudus Rosenberg US Discovery , which recently adopted an expense cap of 0.95%, and the International fund will merge into Schwab International Core Equity . Shareholder approval of each reorganization is required.

Etc.
PIMCO is launching a new fund: PIMCO Tax Managed Real Return. The fund will try to beat inflation by investing in investment-grade municipal bonds, including prerefunded municipal bonds. It will keep duration, a measure of interest-rate sensitivity, between two and eight years. The fund will try to limit capital gains distributions.

Hotchkis and Wiley is reopening Small Cap Value (HWSAX), which has been closed to new investors since 2003. The firm also announced that All Cap Value  (HWAAX) would now be called Value Opportunities because now it can invest in a wide spectrum of securities beyond equities, including high yield, convertibles, and preferred shares.

 Allianz OCC Target , a mid-cap growth fund, has named William Sandow as a comanager to replace Martin Mickus, who recently left the firm. Sandow joins lead manager Jeff Parker.

Transamerica announced it will terminate subadvisor Marsico Capital on Sept. 16 on the  Transamerica Partners Large Growth  and will enter into a new subadvisory agreement with Jennison Associates LLC. OFI Institutional Asset Management, Inc. and Wellington Management Company, LLP will continue to serve as subadvisors on the fund.

Senior fund analyst Gregg Wolper and analyst Greg Carlson contributed to this report.