Few Problems in Oakmark's Manager Search
Oakmark's Bill Nygren discusses the broad talent pool from which to choose new comanagers for several funds, and he also touches on portfolio capacities and constraints.
Shannon Zimmerman: Oakmark Select is not actually bursting at the coffers, so to speak, but a $3.2 billion is a pretty sizeable fund 20 stocks. And Oakmark Global Select certainly isn’t too big yet, about $600 million the last time I looked, but also has a concentrated portfolio. Both of those portfolios have very stringent valuation requirements, as well. So when you think about those constraints and the strategic constraints by design, what’s the capacity in your mind for those funds in particular? Then with Oakmark Fund--even though it is more expansive, it's not a huge portfolio, and it has $7 billion and also has a stringent valuation requirements--how much in the strategy do you think you can run?
Bill Nygren: I think when you think about capacity for funds, what you have to think about is how quickly is someone trying to get in and out of a position and how big a position are they trying to build relative to the types of companies that they're looking for, the universe of investable companies.
Shannon Zimmerman has a position in the following securities mentioned above: OAKLX. Find out about Morningstar’s editorial policies.