Jeremy Grantham Stepping Down as GMO Chairman

Grantham, Mayo, Van Otterloo & Co. announced that Arjun Divecha will replace Jeremy Grantham as chairman of the firm effective Oct. 1. Grantham, who co-founded GMO in 1977, will remain a board member and will continue to serve as the firm's chief investment strategist. Divecha is vice chairman of GMO's board and oversees the emerging-markets team. He joined GMO in 1993.

Grantham is a perennially dour but uncannily accurate market prognosticator, and he'll still be around to share his downbeat views on the markets. Russel Kinnel, Morningstar's director of fund research, notes that GMO was fired by Vanguard in 2008, which might indicate some problems at the firm, but that "Grantham and GMO have made some remarkable prescient calls on the housing implosion and asset allocation."

AllianceBernstein Departure Affects Vanguard Windsor
The turnover continues at  AllianceBernstein (AB). John Mahedy, CIO of U.S. large cap value at the firm, is leaving in October for a post at Sanders Capital Management, the firm run by the firm's former CEO, Lew Sanders. Mahedy is the third CIO to leave this year following the departure of Sanders and hiring of CEO Peter Kraus in December 2008. In February, Marc Mayer left his role as CIO of AllianceBernstein's blend mandates to become CEO of GMO. Mutual fund CIO Ranji Nagaswami resigned shortly thereafter. (A few months ago, we expressed concerns about all of the changes at the firm.)

AllianceBernstein veterans Gerry Paul and David Yuen will assume Mahedy's responsibilities. They will serve as co-CIOs of U.S. large cap equities and Paul will also become CIO of the North American value equity team. Paul and Yuen will also replace Mahedy and Marilyn Fedak, vice chair of investment services at AllianceBernstein, as comanagers of  Vanguard Windsor (VWNDX). They will run about 40% of the fund's assets, the same portion AB was responsible for under Mahedy and Fedak. The other 60% of assets will still be managed by James Mordy of Wellington Management, who took over that slice last year.

Third Avenue Focused Credit Up and Running
Third Avenue's new fund, Third Avenue Focused Credit, is up and running but is proceeding with care in the current market conditions. The fund is managed by recent hire Jeffrey Gary with assistance from Thomas Lapointe, who is also new to the Third Avenue investment team. Garry, who came to Third Avenue three months ago from BlackRock, says he's not in a huge hurry to get the fund fully invested, though. Rather, he's cautious, considering the current investment environment, and he's hopeful more dollars will come in, helping him reduce transaction costs.

This fund is distinctive from the four other Third Avenue funds because it is more focused on bonds (though it may also hold stocks and the other funds can hold some bonds). And just like Third Avenue's first and previously only fund foray into bonds, Third Avenue High-Yield which eventually became  Pioneer High Yield (TAHYX), this one will also buy convertible bonds. However, unlike that fund, it will emphasize bank loans, both performing and distressed; Gary says that market has burgeoned in the past several years, but the financial crisis fallout has meant fewer analysts are employed to analyze them, creating inefficiencies.

SunAmerica and Federated Latest to Downsize Lineups
Setting aside the launch of Third Avenue Focused Credit Fund and this week's official debut of Chuck Akre's Akre Focus Fund (we wrote about Akre's new fund last month), the story in 2009 has been fund liquidations and mergers. Russ Kinnel discussed the trend earlier this week.

SunAmerica announced recently that they plan to merge nine of their smaller funds into five of their larger equity funds. Affected funds include SunAmerica Blue Chip Growth  and SunAmerica Disciplined Growth , which are being merged into the much larger  SunAmerica Focused Large Cap Growth .  SunAmerica New Century  will be merged into SunAmerica Focused Small-Cap Growth . Also, Federated has proposed that its International Leaders Fund (FGFAX) acquire its International Equity Fund . If approved by shareholders, the merger will occur around Nov. 13.

Fidelity Opens Fund, Shuffles Managers
 Fidelity Small Cap Retirement (FSCRX) has been opened to retail investors (it was previously available only through institutional retirement plans) and has changed its name to Fidelity Small Cap Discovery to reflect this broader availability. One thing that won't change: The fund is still managed by Chuck Myers, who has been in charge since March 2006. The Russell 2000 Index will remain the fund's benchmark.

Harley J. Lank joins Tom Soviero as comanager of  Fidelity Advisor High Income Advantage (FAHYX). Lank joined Fidelity as an analyst in 1996 and will continue to pick high-yield bonds for  Fidelity Puritan (FPURX) and preferred stocks for  Fidelity Strategic Dividend & Income (FSDIX). Soviero will continue to manage  Fidelity Leveraged Company Stock (FLVCX),  Fidelity Advisor Leveraged Company Stock (FLSTX), and  Fidelity Convertible Securities (FCVSX).

Colin Chickles no longer serves as a comanager of Fidelity Series Emerging Markets (FEMSX), which is available only through Fidelity's target-date funds (and should not be confused with  Fidelity Emerging Markets (FEMKX), which interestingly hasn't had much manager turnover). Earlier this year, comanager John Hynes departed. Alicia Frank, who started in late 2008, is now the fund's sole manager.

Etc.
According to recent filings, PIMCO and  Goldman Sachs (GS) are the latest firms to stop offering the B share class for their funds. PIMCO cited decreased demand for these shares and a desire to simplify choices for shareholders as reasons for their decision.

As of Oct. 31, Harbor SMID Value will now be called Harbor Small Company Value. The benchmark will change from the Russell 2500 Value Index to the Russell 2000 Value Index.

 Oppenheimer Strategic Income (OPSIX) announced that it will participate in the Term Asset-Backed Securities Loan Facility program (TALF). This program allows the fund to receive loans from the government for purchases of certain investment-grade, asset-backed securities.

Following a period of outflows, Hartford has reopened Hartford Midcap Value. The fund had been closed to new investors for five years. The firm reopened  Hartford Midcap (HFMCX) in December 2008; it too had been closed for about five years.

Kevin Dreyer has been named associate portfolio manager for  Gabelli Asset (GABAX). Mario Gabelli is still the lead manager here; he has managed the fund since its March 1986 inception.