BlackRock's Bond Chief Walks
Plus, employees buy Montag & Caldwell from BNP Paribas.
Plus, employees buy Montag & Caldwell from BNP Paribas.
Curtis Arledge has stepped down from his role as chief investment officer of BlackRock's (BLK) fixed-income unit to fill the CEO vacancy at Bank of New York Mellon's (BK) asset-management unit. He replaces Ronald O'Hanley, who left BNY Mellon to become Fidelity's president of asset management and corporate services in May, one of two top roles alongside Abigail Johnson, president of Fidelity Personal, Workplace and Institutional Services.
Arledge may be leaving the world's biggest asset manager, but BNY Mellon's assets under management grew to $1 trillion under O'Hanley's watch, roughly the size of BlackRock's bond book.
Rick Rieder succeeds Arledge as BlackRock's bond CIO. Rieder, a former Lehman Brothers executive, joined BlackRock in 2009 when the firm bought R3 Capital Partners, a hedge fund he founded and ran after more than two decades at Lehman. Rieder initially joined as head of BlackRock's alternative fixed-income strategies and corporate credit. He was promoted to deputy fixed income CIO under Arledge in early 2010. Rieder now reports to BlackRock's head of global fixed income management Peter Fisher, who also co-led the fixed-income team from late 2007 through 2009.
As Rieder's credentials show, BlackRock's executive ranks don't want for experience in the wake of Arledge's departure. But it remains to be seen how continued organizational change will impact the firm's efforts to translate its considerable investment experience and industry-leading risk-management capabilities into outstanding performance for its taxable-bond funds. BlackRock's taxable fixed-income group has seen the departure of several senior investment professionals in recent years, including co-founder and former fixed income CIO Keith Anderson in late 2007 and fellow BlackRock veteran Scott Amero in the first half of 2010. Arledge rejoined the firm in mid-2008 to help fill the leadership gap left by Anderson's departure and then assumed the CIO role in Amero's place in early 2010, but his tenure proved short-lived.
Several of the firm's bond funds have failed to distinguish themselves over the long haul, in part due to ill-timed bets on commercial mortgage-backed securities and financial firm debt in 2008. That includes the nearly $3 billion BlackRock Total Return (MAHQX) and the $2 billion BlackRock Total Return II (BCBAX), both of which have lagged more than two thirds of intermediate-term bond funds during the past five years. Arledge comanaged these funds along with Matt Mara since late 2008, and Rieder will now manage these funds and several others alongside Mara.
The firm's corporate-bond efforts have remained a relative bright spot, though, even after the departure of high-yield managers Jeff Gary and Kevin Booth in 2008. Gary now works at Third Avenue Management while Booth ended up at RS Investments.
BlackRock High Yield Bond (BHYAX) manager Jim Keenan speaks highly of the addition of the R3 Capital team, and Rieder's decades of experience with corporate credit and continued oversight of the corporate team is a plus.
Employees Buy Montag & Caldwell
The employees of Montag & Caldwell announced this week that they will buy the company from BNP Paribas . Slightly more than half of the firm's 49 employees will participate in buying an equity stake.
Montag is a $14 billion investment-management firm founded in 1945 that specializes in growth equity investing.
This move should help finally bring ownership stability to a firm that has seen multiple controlling owners over the past few years.
More than 90% of the firm's roughly $3 billion in mutual fund assets is in Morningstar 4-star-rated Aston/Montag & Caldwell Growth (MCGFX), for which Montag & Caldwell serves as subadvisor.
Etc.
In a letter to the Investment Company Institute, the trade group for the mutual fund industry, the SEC urged funds to improve their disclosure of derivatives.
Dreyfus Opportunistic Small Cap (DSCVX) will close to new investors on Nov. 30.
An in-house Calvert team will replace Bridgeway as the manager of Calvert New Vision Small Cap on Oct. 29, 2010. This is also when a proposed merger will send the fund's assets into Calvert Small Cap Value (CCVAX), which will then be renamed Calvert Small Cap Fund. Calvert also announced that in preparation for the merger of Calvert Mid Cap Value into Calvert Capital Accumulation (CCAFX) on Oct. 29, New Amsterdam Partners took over management responsibilities of Mid Cap Value on July 30.
Jiyoung Kim, formerly of Royce Asia-Pacific Select decided to leave the firm and start her own hedge fund. James Harvey remains as sole manager.
James Harper and Matthew Nagle joined the portfolio-management team of Templeton World (TEMWX) and Templeton Growth (TEPLX).
TD Ameritrade, a brokerage subsidiary of TD Ameritrade Holding Corporation , announced it will offer approximately 80 T. Rowe Price (TROW) Investor Class funds with no transaction fee.
Matthew Toms and Michael Mata replaced Peter Guan, Christopher Diaz, and Michael Hyman on the portfolio-management team of ING Intermediate Bond (IIBAX).
Ross Sakamoto joined the portfolio-management team of Nuveen Multi-Manager Large-Cap Value .
Pending shareholder approval, Lord Abbett Connecticut Tax-Free Income , Lord Abbett Georgia Tax-Free Income , Lord Abbett Hawaii Tax Free Income , Lord Abbett Missouri Tax-Free Income , and Lord Abbett Pennsylvania Tax-Free Income will all merge into Lord Abbett National Tax- Free Income (LANSX).
Pending shareholder approval, Dreyfus/The Boston Company International Core Equity will liquidate all assets by Jan. 25, 2011.
On Aug. 16, 2010, William Blair Value Discovery will change its name to William Blair Small Cap Value.
Associate director of fund analysis Miriam Sjoblom and fund analyst David Falkof contributed to this report.
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