Vanguard Hires a New Firm with an Old Name

In an unconventional move, Vanguard has hired a firm that only recently put out its shingle to serve as the sixth subadvisor on the family's largest actively managed stock fund,  Vanguard Windsor II (VWNFX).

Sanders Capital Management, which opened its doors late last year, has started running 8.5% of the $35 billion in assets Windsor II. Vanguard usually hires managers with longer track records, but Sanders Capital is more established than it looks.

Firm founder Lewis Sanders launched the boutique after resigning as AllianceBernstein CEO last year. Sanders also has a history as a value investor going back to the 1970s, including a stint leading the AllianceBernstein value equity team that has run portion of  Vanguard Windsor (VWNDX) since 1999.

It was Vanguard's familiarity with Sanders' philosophy, approach, and history at AllianceBernstein and its predecessor firm, Sanford C. Bernstein, that led the family to hire Sanders Capital just as it was getting off the ground. Sanders also was able to recruit some AllianceBernstein talent, including John Mahedy, who until last September was CIO of AllianceBernstein's domestic-value strategies and a leader of the squad working on Windsor; and Alex Shabshis, who put in more than 20 years at AllianceBernstein and Sanford C. Bernstein as a quantitative analyst and manager. Mahedy is now Sanders Capital's co-CIO and research director, and Shabshis is its quant director.

Sanders said in an interview that his new firm will employ an approach similar to the one he developed at AllianceBernstein. It will rely on fundamental research to identify and exploit value opportunities and behavioral dislocations in the market but will also use quantitative tools to enhance and buttress analysts' research. The firm has hired about 10 analysts and could hire a few more, Sanders said.

Sanders Capital joins Barrow, Hanley, Mewhinney & Strauss; Lazard Asset Management; Hotchkis & Wiley; Armstrong Shaw; and Vanguard's quant group on Windsor II. Sanders will run a compact, relatively low-turnover portfolio of fewer than 50 stocks for Windsor II, which lost nearly 37% in 2008 but has been a steady, above-average long-term performer. The addition of Sanders shouldn't change the characteristics or expenses of Windsor II, said Chris McIsaac of the portfolio review group that selects and monitors Vanguard subadvisors. The family has no plans to change the other subadvisors. "This was just a great opportunity that came across our desk," he said.

Wells Fargo Picks Up Evergreen Managers as Part of Merger
If shareholders approve, this June Wells Fargo will give 27 recently acquired Evergreen Funds the Wells Fargo Advantage name. It also will merge 53 funds from both firms and liquidate four Evergreen funds and one Wells Fargo fund.

Wells gains some notable managers in the process, including Aziz Hamzaogullari of  Evergreen Omega (EKOAX) and Evergreen Large Company Growth (EKJAX). Hamzaogullari will continue to run the Omega fund, which will be renamed Wells Fargo Advantage Omega Growth, and he will also run a separate fund called Wells Fargo Advantage Premier Large Company Growth, the result of a merger between Evergreen Large Company Growth and  Wells Fargo Advantage Large Company Growth .

Wells also will keep  Evergreen Diversified Capital Builder (EKBAX) and Diversified Income Builder (EKSAX) manager Margie Patel who put up solid long-term results at Pioneer Equity Opportunity  and  Pioneer High Yield (TAHYX) before joining Evergreen in 2007. Her Evergreen funds will just switch names.

Wells Fargo has decided to stick with veteran manager Walter McCormick and comanagers Gary Mishuris and Emory Sanders, who managed  Evergreen Equity Income  and  Evergreen Fundamental Large Cap  with solid results. Evergreen Equity Income will merge with Wells Fargo Advantage Specialized Financial Services  to form the new Wells Fargo Advantage Classic Value, run by McCormick and Mishuris. Evergreen Fundamental Large Cap will become Wells Fargo Advantage Core Equity with McCormick and Sanders managing.

Jim Tringas'  Evergreen Special Values (ESPAX) and Evergreen Small Cap Value  will merge and become Wells Fargo Advantage Special Small Cap.

Wells Fargo will hold onto subadvisor Tim O'Brien of Crow Point Partners, who has done run  Evergreen Utility and Telecom (EVUAX), which will get the Wells Fargo Advantage name. Wells Fargo will also keep the subadvisory relationship with Grantham, Mayo, Van Otterloo & Co. and give  Evergreen Asset Allocation (EAAFX) its brand.

Wells Fargo will fire subadvisor Tattersall Advisory Group, whose Andrew Cestone will no longer manage  Evergreen High Income (EKHAX). It will be renamed Wells Fargo High Yield Bond. Clark Stamper, from Stamper Capital & Investments, also will no longer manage  Evergreen Strategic Municipal Bond (VMPAX), which will get the Wells Fargo advantage name.

For more information and the complete list of changes click here. 

Gundlach Hires Another TCW Alum and Files Prospectus
DoubleLine, the firm recently founded by Jeffrey Gundlach following his ouster from TCW late last year, has hired TCW veteran Bonnie Baha, former head of the corporate-bond group and corporate credit research at TCW, and five members of TCW's government/corporate team have joined DoubleLine. Baha is portfolio manager and head of global developed credit at DoubleLine, and her team members will serve as corporate securities traders and credit analysts.

In other DoubleLine news, the firm filed its prospectus for three different funds: DoubleLine Total Return Bond, DoubleLine Core Fixed Income, and DoubleLine Emerging Markets Income. The I shares for DoubleLine Total Return Bond and Core Fixed Income will charge expenses of 0.49% after fee waivers versus an expense ratio of 0.44% for the I shares of TCW Total Return Bond (TGLMX) and TCW Core Fixed-Income (TGCFX). DoubleLine has the edge with its Emerging Markets Income fund. Its expense ratio is 0.95% after fee waivers versus 1.17% for TCW Emerging Markets Income (TGEIX).

Minimum initial investments for the I shares of DoubleLine funds are $25,000 for regular accounts and $5,000 for IRAs.

Some Aston Funds to Merge
Aston will hold a shareholder meeting on March 15 to approve the new advisory agreement between Aston and the funds, which is necessary because AMG is buying Aston. As part of this, they're electing a new board and also planning to merge  Aston Growth  into  Aston/Montag & Caldwell Growth (MCGFX); and Aston Balanced  into  Aston/Montag & Caldwell Balanced . These mergers are not a surprise--for the past couple of years, Montag & Caldwell has run Aston Growth as a clone of Aston/Montag & Caldwell Growth, and the equity portion of Aston Balanced as a clone of the equity portion of Aston/Montag & Caldwell Balanced. The only difference is that the bond part of Aston Balanced is currently run by Taplin, Candida, and Habacht, who also subadvises some Aston bond funds, while the bond part of Aston/Montag & Caldwell Balanced is run by Montag & Caldwell.

Jennison Associates Co-Founder Dies
John Howard Hobbs, who co-founded money management firm Jennison Associates in 1969, recently died at the age of 73. In 1985, Jennison became a wholly owned subsidiary of what is now Prudential Financial. Jennison currently manages about $85 billion.

Allianz OCC Growth Gets New Comanager
Robert Urquhart of  Allianz OCC Growth (PGWAX) is no longer with the firm. He had run the fund since November 2005. This follows the departure of comanager Martin Mickus in August 2009. Jeff Parker, CIO of Oppenheimer Capital (the fund's subadvisor), has taken over as lead manager. He was formally added as a comanager following Mickus' departure. Bill Sandow, a former analyst, has been named Parker's comanager. They already work together on mid-growth offering  Allianz OCC Target .

Soft Close for AIM International Small Company
 AIM International Small Company (IEGAX) will be offered on a limited basis to certain investors, effective at the close of business on Jan. 29, 2010. Existing shareholders will still be able to add to their investment. Other investors such as retirement accounts may also be eligible to open new accounts. A complete list of eligible investors is available in the fund's prospectus. The fund's assets currently stand at about $500 million.

Etc.
Managers Investment Group announced that Managers Fremont Bond fund has been renamed Managers PIMCO Bond fund. No other changes are being made to the fund.

Associate director of fund analysis Dan Culloton and mutual fund analysts Greg Brown, David Kathman, and Ryan Leggio contributed to this article.