Sequoia Closes to Some Investors

A window of opportunity is shutting for investors looking to buy shares of  Sequoia (SEQUX), one of 2011's best-performing funds. The fund's parent firm, Ruane, Cunniff & Goldfarb, announced the offering will close on Jan. 9 to new investors who purchase shares through intermediaries such as Schwab. Instead, new investors will be limited to buying shares through the fund's transfer agent. The move should cool off the fund's recent surge of asset inflows. It took in nearly $900 million in 2011, a 25% increase in assets from the start of the year, mostly from these platforms. The inflows come on the heels of the fund's big 13% gain in 2011, which trounced the 1% loss racked up by the average large-blend peer. Not to fret, existing shareholders will still be able to buy shares through brokerages. Interested investors, though, should take note: The last time the fund closed to new money, it was 25 years before the doors were reopened.

Artisan Scuttles IPO Plan
Artisan Partners Asset Management, home to Morningstar's Domestic-Stock Fund Manager of the Year for 2011, has canceled its plan to raise as much as $250 million through an initial public offering. The Milwaukee, Wis.-based firm, which remains in solid financial shape, blamed unfavorable market conditions for its decision.

The IPO, originally filed in April 2011, would have helped the company pay down debt. Its liabilities stem from a $400 million loan taken out in 2006 that primarily allowed founders Andrew Ziegler and his wife, Carlene Murphy Ziegler, to cash out some of their ownership stake. The outstanding loan, originally set for a five-year term, was extended in 2010 and now matures in July 2013. The halted IPO doesn't put the firm in a bind. According to an SEC filing, even after accounting for the interest it paid on the loan, the firm turned a $42.5 million profit in 2010 on $382.3 million of revenue. Cash on hand totaled $159 million. Fee income should also increase going forward because the firm has been enjoying asset inflows.

The canceled IPO is a minor setback for the highly regarded fund shop. The firm is known for being a good steward of its shareholders' capital. It tends to close its offerings at reasonable asset levels and avoids launching trendy funds. Long-term performance at most of the firm's 12 offerings has been solid. Indeed, Scott Satterwhite, James Kieffer, and George Sertl, the team behind  Artisan Mid Cap Value (ARTQX),  Artisan Small Cap Value , and  Artisan Value (ARTLX), were recently named Morningstar's 2011 Domestic-Stock Fund Manager of the Year. Their colleagues David Samra and Daniel O'Keefe, who helm  Artisan International Value (ARTKX), won the award in 2008.

This may not be the end of Artisan's IPO ambitions. A recent SEC filing hinted that the firm may resume its effort to sell shares to the public in the future if market conditions improve.

Curtain Closes on DoubleLine, TCW Drama
One of the mutual fund world's biggest sagas quietly came to an end recently while most investors were taking a holiday break. DoubleLine Capital and TCW Group ended their two-year-long legal battle on Dec. 29, 2011. Both firms announced they had reached a settlement, but they didn't disclose the details of the agreement.

The contentious legal battle stemmed from the dismissal in 2009 of TCW's chief investment officer, Jeffrey Gundlach, a high-profile fixed-income expert (and a former Morningstar Fund Manager of the Year). In the wake of his departure, Gundlach quickly set up his own shop, DoubleLine, and convinced several of his colleagues to join him. The lawsuits soon flew. TCW argued its former CIO had walked out with valuable trade secrets while Gundlach charged that his old employer owed him and his colleagues millions in back pay. In Sept. 2011, a jury awarded Gundlach and his staff $66.7 million in unpaid wages, but also found him and his staff in breach of their fiduciary duty to TCW.

Shareholders should applaud the end to this saga, which had become a distraction for both firms.

INTECH Succession Plan Takes Shape
Intech, the Janus subsidiary that runs $38 billion, recently announced that its founder, Robert Fernholz, was stepping down as manager at INTECH International ,  INTECH U.S. Core ,  INTECH U.S. Growth , and  INTECH U.S. Value (JRSIX). In addition, he will relinquish his chief investment officer role to Adrian Banner, who helped manage the funds and had shared the CIO title since 2009. INTECH says the moves are part of a long-term succession plan. Indeed, Fernholz will remain at the company in a consulting role and will still act as chairman of the investment committee. In any regard, the manager changes shouldn't have a big impact on the funds because computer models drive portfolio construction. The firm also announced that Vassilios Papathanakos was named as a manager on all four funds. Papathanakos is currently head of research.

Etc.
RS Investments has found a replacement for its outgoing chief executive officer. Matthew Scanlan will take the helm of the San Francisco-based investment company. Scanlan was previously CEO of Renaissance Institutional Management, a subsidiary of the hedge fund manager Renaissance Technologies. Scanlan's appointment fills a void created when current CEO Terry Otton announced his retirement in late 2010.

 Wintergreen Fund introduced an Institutional share class at the end of 2011. The $100,000 minimum investment share class will charge a fee of 1.68%, 21 basis points below the Investor share class  but still higher than the 1.48% median for no-load world-stock funds.

 Third Avenue International Value  added a comanager, effective Jan. 3. Matthew Fine, analyst on the strategy for the past seven years, will join the fund's since-inception manager, Amit Wadhwaney.

Kevin Dwan has been named a comanager on  MFS International Growth (MGRAX), joining current manager David Antonelli. The move is in keeping with the firm's tendency to use a team-managed approach. Dwan will continue to serve as the firm's director of research-Asia. He is based in MFS' Singapore office.

Oakmark announced the retirement of  Oakmark Equity & Income (OAKBX )manager Ed Studzinski at the end of 2011. Clyde McGregor will continue to lead the strategy on his own for the time being.

Baron Funds launched Baron Energy and Natural Resources. James Stone will take the lead as portfolio manager at the new fund. Stone joined the firm in 2009 to develop an energy and natural-resources strategy.

 Allianz AGIC Target  will merge with slightly cheaper Allianz RCM Mid-Cap (RMDAX) during the second quarter of 2012.

 American Beacon International Equity (AAIPX) has terminated its subadvisor relationship with the Boston Company Asset Management. The remaining three subadvisors--Causeway Capital Management, Lazard Asset Management, and Templeton Investment Counsel--will pick up the slack. Kirk Henry and Clifford Smith from the Boston Co. still run  Dreyfus Emerging Markets  and  Dreyfus International Value .

Baird has hired a small/mid-cap-value equity team to run a new stock fund. Michelle Stevens will lead the Cincinnati-based team of four to manage individual and institutional portfolios. The firm plans to roll out Baird Small Cap Value in the first half of 2012. Prior to joining Baird, Stevens was a portfolio manager at Transamerica Investment Management.

Joyce Gordon is stepping down from the portfolio oversight committee overseeing the American Funds Target Date Retirement Series. Gordon, who has been a member of the committee since the series' launch in 2007, will continue to serve as a portfolio manager on a number of funds. Wesley Phoa and Bradley Vogt were named to the committee at the start of this year and join current members John Smet, Alan Berro, Nicholas Grace, and James Lovelace.

MainStay's board will submit a proposal to merge MainStay Equity Index   into MainStay S&P 500 Index (MSPIX). Shareholders will vote to approve the merger in May 2012.

Abhay Deshpande is no longer listed as a portfolio manager on  First Eagle Gold (FEGIX). Deshpande provided backup support to current lead manager Rachel Benepe and associate manager Chris Kwan.

Mutual fund analyst Kathryn Spica contributed to this report.