Artisan Partners Goes Public

Artisan Partners Asset Management, a boutique fund company that gets an A for corporate culture according to its Morningstar Stewardship Grade, opens itself up to new potential conflicts by planning to go public.

The Milwaukee-based family said in an initial public offering filing with the SEC earlier this week that it plans to raise as much as $250 million with the stock offering to pay down existing debt and provide ownership incentives for employees, among other uses. After the IPO is complete, Artisan Partners Limited Partnership will continue to advise mutual funds and other investment vehicles. Current employees will also own a portion of the firm.

Artisan is known for closing its funds to new investors at modest asset levels, a practice that has made it easier for the managers to generate strong long-term returns. The firm has also kept its fund lineup lean, avoiding trendy and narrowly focused funds. The company has been quite profitable with this philosophy. It has filed reported operating margins of around 40% in each of the past three years. Going public, however, could create pressure to keep funds open longer and launch more funds in order to attract more fee-generating assets, protect the firm's margins, and generate more growth.

Artisan Partners began in 1994 and runs domestic and internationally focused stock funds. The firm currently has five investment teams that run 12 strategies. As of year-end 2010, the firm held $57.5 billion in assets under management.

So far Artisan has been a good steward of fund investors' capital. It will be interesting to see how, as a public company, it handles the sometimes competing interests of outside shareholders and fund owners.

T. Rowe Price Manager Passes Torch
Asset-allocation manager Edmund Notzon will retire from T. Rowe Price on Dec. 31 of this year. Notzon will pass his portfolio-management responsibilities to Charles Shriver. Consistent with T. Rowe Price's careful succession planning, this transition has been under way for many months.

Notzon started at T. Rowe Price in 1989 and manages  T. Rowe Price Balanced (RPBAX),  T. Rowe Price Personal Strategy Balanced (TRPBX),  T. Rowe Price Personal Strategy Growth (TRSGX),  T. Rowe Price Personal Strategy Income (PRSIX),  T. Rowe Price Spectrum Growth (PRSGX), and  T. Rowe Price Spectrum Income (RPSIX). Shriver will take over Notzon's funds on Oct. 1, 2011. Shriver started at T. Rowe Price in 1991, joined Notzon's asset-allocation group in 1999, and has worked with Notzon on his funds since 2005.

As chairman of the asset-allocation committee, Notzon also helps run the T. Rowe Price target-date series ( T. Rowe Price Retirement 2035 (PARKX)). The asset-allocation committee directs strategic decisions for the series. Rich Whitney will replace Notzon as chairman of the committee. Current manager Jerome Clark will continue to have day-to-day portfolio-management responsibilities for the target-date series.

Fairholme Focused Income Raises Fees
 Fairholme Focused Income (FOCIX) raised the fund's expense ratio to 0.75% from 0.50% on March 31, 2011. The fund reduced its fee waiver to 0.25% from 0.50% and currently has around $500 million in assets.

BlackRock Pulling in Its Horns
BlackRock announced on April 1, 2011, that it will merge 13 funds into existing BlackRock offerings. This outgoing group includes six equity funds and seven fixed-income offerings.

BlackRock says that these moves are designed to rationalize the firm's lineup, eliminating overlap between offerings. As is often true in such cases, mediocre performance is also a contributing factor. Judging by the median trailing category returns, the results of the 13 outgoing funds have been generally middling. As a group, the acquiring funds have slightly better records, although that certainly isn't true in every case. Both  BlackRock Small/Mid-Cap Growth , the target fund, and  BlackRock Mid-Cap Growth Equity (BMGAX), the acquiring fund, land near their respective categories' bottom 25% over the past five years.

All 13 funds being merged away joined BlackRock through acquisition. Nine of the funds are legacy Merrill Lynch offerings, which BlackRock bought in 2006. On the other hand, five of the acquiring funds are legacy BlackRock funds. To be sure, four other acquiring funds are legacy Merrill Lynch offerings. Even so, BlackRock seems to be relying less on legacy Merrill Lynch personnel these days. Recall that Merrill veteran Bob Doll was replaced as the firm's global CIO in 2010. Doll subsequently became the firm's chief equity strategist for fundamental equities.

Former Matthews Manager Starts Own Firm
Andrew Foster, who left Matthews Asian Funds in March, started Seafarer Capital Partners, an investment firm that could advise mutual funds and other investment vehicles. The firm is not currently registered with the SEC. Before leaving Matthews, Foster managed  Matthews Asian Growth & Income (MACSX),  Matthews Asian Dividend (MAPIX), and  Matthews India (MINDX). The funds totaled $6 billion at the time of Foster's departure.

Prominent Fund Manager Calls for CEO's Resignation
David Winters, manager of  Wintergreen , criticized Consolidated-Tomoka (CTO) in a letter to the Florida real estate company's board. Winters criticized the firm's decision to keep CEO Bill McMunn as a consultant through 2012 after his coming resignation later this year, citing poor oversight during McMunn's tenure. Winters also stated that the mutual fund would vote against McMunn if he ran for his board seat after 2012. Wintergreen currently owns 27% of CTO.

This is not the first time that Winters has publicly challenged CTO's management. In 2009, when shareholders were to elect members to the board of directors, the fund nominated several directors to the board and made three shareholder proposals. A number of these nominated directors were elected (ousting incumbent directors), and all three shareholder proposals were passed. Bridget Hughes details the fund's actions in this article.

Etc.
Matt Williams left the management team of Quant Small Cap (QBNAX). The fund is now managed by Robert von Pentz and Rhys Williams.

Jerome Philpott and Stuart Roberts no longer manage Wells Fargo Advantage Small Cap Growth . The fund is now managed by Joseph Eberhardy, Thomas Ognar, and Bruce Olson. Multiple portfolio managers have left Wells Fargo this year, including a mid-cap growth manager who left for Invesco in late March.

American Century added American Century LIVESTRONG 2055 to its target-date portfolio on March 31, 2011. As of its inception, the fund's asset allocation was 85% stocks and 15% bonds. Like the rest of the LIVESTRONG series ( American Century LIVESTRONG 2035 (ARYAX)), the fund's asset allocation will change with time.

John Popp will join the management team of Credit Suisse High Income (CHIAX) June 3, 2011.

Loomis Sayles Global Markets changed its name to  Loomis Sayles Global Equity and Income (LGMAX).

Gregory Dirkse and Brian Janowski joined the management team of  Marshall Mid-Cap Value . The fund is now managed by Matthew Fahey, Dirkse, and Janowski.

B shares of  Legg Mason Clearbridge Large Cap Growth  and Legg Mason Western Asset Massachusetts Municipal  will close to new and existing investors July 1, 2011.

Wells Fargo filed to launch Wells Fargo Advantage Dow Jones Target 2055. The fund will be an addition to the firm's existing target-date series ( Wells Fargo Advantage DJ Target 2035 ).

Invesco announced a handful of mergers in its asset-allocation fund lineup. Invesco Conservative Allocation  and Invesco Van Kampen Asset Allocation Conservative  will merge into Invesco Moderately Conservative Allocation (CAAMX). Invesco Van Kampen Asset Allocation Moderate  will merge into Invesco Moderate Allocation . Invesco Moderate Growth Allocation  and Invesco Van Kampen Asset Allocation Growth  will merge into Invesco Growth Allocation (AADAX). The mergers will take effect in June 2011.

Invesco Balanced-Risk Retirement 2010  will merge into Invesco Balanced-Risk Retirement Now  in June 2011.

Allen Bond and Kevin Walkush will join the investment team of  Jensen (JENSX) on May 1, 2011. The fund also adopted breakpoints in the annual investment advisory fee on April 1, 2011.

 Columbia Small Cap Growth II  and  Columbia Small Cap Growth I (CGOAX) will close to most new investors April 29, 2011.

David King and Michael Barclay joined the management team of  Columbia Dividend Income (LBSAX). The fund is now managed by Richard Dahlberg, Scott Davis, David King, and Michael Barclay.

John Barrett joined the management team of  Columbia Small Cap Value (CSMIX). The fund is now managed by Barrett, Stephen Barbaro, and Jeremy Javidi.

Goldman Sachs registered to launch Goldman Sachs Brazil Equity, Goldman Sachs India Equity, Goldman Sachs China Equity, and Goldman Sachs Korea Equity in April 2011. The funds will invest at least 80% of assets in stocks that are economically related to or participate in the markets of the named country. Alina Chiuw and Gabriella Antici will manage Goldman Sachs Brazil Equity and Goldman Sachs China Equity. Rick Loo will manage Goldman Sachs India Equity and Goldman Sachs Korea Equity.

The portfolio-management team responsible for  Aston/Optimum Mid Cap (ABMIX) left Optimum Investment Advisers and joined Fairpointe Capital. Aston will hire Fairpointe Capital as the new subadvisor to the fund and change the fund's name to Aston/Fairpointe Mid Cap on April 30, 2011. There will be no changes to the management team or strategy of the offering.

Robert Rowland is no longer portfolio manager of  Fidelity Japan (FJPNX). The fund will be managed by Rei Shigekawa.

Editorial director Kevin McDevitt, senior mutual fund analysts Christopher Davis and Katie Rushkewicz, and fund analysts Ryan Leggio, Greg Carlson, and Karin Anderson contributed to this report.