Fidelity Makes Manager Changes
Three former Artio managers start their own firm and fund but keep their track record, The Hartford to liquidate its target-date series, and AMG takes a majority investment in yet another boutique manager.
Several Fidelity funds are changing managers. On Jan. 1, 2014, Ramona Persaud will take the helm of Fidelity Dividend Growth (FDGFX) and Fidelity Advisor Dividend Growth (FDGTX) from Larry Rakers. Rakers will join the firm's global asset-allocation group. Persaud has managed Fidelity Global Equity Income (FGILX) since its May 2012 inception and a small slice of Neutral-rated Fidelity Equity-Income (FEQIX) since October 2011. Persaud will boost her new charges' exposure to the market's behemoths and modestly raise their dividend yield in an effort to damp volatility. Rakers generated strong absolute returns during his five-year tenure, but his emphasis on cyclical fare juiced volatility.
Matt Fruhan replaced Harlan Carere on Dec. 16 at the helm of Fidelity Advisor Capital Development (FDTTX). Carere posted a subpar record in his six-year tenure. Fruhan will continue to manage Silver-rated Fidelity Large Cap Stock (FLCSX) (which he's run since May 2005), Fidelity Mega Cap Stock (FGRTX), and Bronze-rated Fidelity Growth & Income (FGRIX).
Ex-Artio Managers Launch International-Equity Fund
Three former Artio managers have started their own firm, R Squared Capital Management, and recently launched their first mutual fund, which is devoted to international stocks.
Portfolio managers Rudolph-Riad Younes, Richard Pell, and Michael Testorf worked together for more than 15 years at Artio, which Aberdeen Asset Management purchased earlier this year. Younes and Pell were the managers of Artio International Equity, now known as Aberdeen Select International Equity (BJBIX) from 1995 until May 22 of this year. (Pell also was a named manager on what is now called Bronze-rated Aberdeen Total Return Bond until May 22.)
Now, the trio have formed New York-based R Squared and have launched RSQ International Equity . R Squared follows the same strategy that was used by Artio International Equity, a top-down and bottom-up stock-selection process that seeks long-term winners in both developed and emerging markets. The SEC is allowing them to use their entire track record from Artio including the months between the sale to Aberdeen and the launch of their new fund, during which time they managed a private, identically managed fund.
The new fund holds about 150 securities.
AMG Buys Majority Stake in SouthernSun Asset Management
On Dec. 19, Affiliated Managers Group (AMG) announced that it has agreed to acquire a majority equity interest in Memphis, Tenn.-based SouthernSun Asset Management, which has about $5 billion in assets.
Founded in 1989, SouthernSun offers small- and mid-cap strategies and recently launched a global investment strategy. Its flagship fund is the $828 million SouthernSun Small Cap Fund (SSSFX), and it also manages the $309.5 million SouthernSun US Equity (SSEFX).
According to a release, as part of the transaction, SouthernSun's senior professionals have agreed to long-term contracts with the firm, and the SouthernSun funds will become part of AMG's mutual fund platform.
The Hartford to Liquidate Its Target-Date Series
On Dec. 20, The Hartford announced that it will be liquidating its target-date series, known as the Hartford Target Retirement funds. According to a prospectus supplement filed on Dec. 20, the funds will be liquidated on or about June 30, 2014, with no new flows accepted after Jan. 31, 2014.
As recently as 2012, Hartford had made some significant changes to the management approach for its target-date funds, after the firm shifted subadvisory responsibilities for all its funds from Hartford to Wellington. The asset-allocation team at Wellington adopted a risk-balanced framework that emphasized alternatives, commodities, and tactical allocation in a far more pronounced fashion.
While assets in the target-date funds had seen healthy growth, total assets remained at only about $700 million at the end of 2012. The more likely reason for Hartford's decision to liquidate the funds is related to the sale of its retirement-plan business to MassMutual in early 2013. With the loss of its built-in proprietary distribution network, the firm faced the far more challenging prospect of selling its target-date funds on other firms' platforms.
Titan Advisors Files for Alternative Mutual Fund
On Dec. 4, Port Chester, N.Y.-based hedge fund Titan Advisors filed paperwork with U.S. regulators seeking permission to create its first alternative mutual fund.
The proposed Titan Alternative Fund would invest in a variety of alternative investment strategies, using derivatives and unnamed subadvisors. According to the filing, the fund could invest in a variety of strategies, including long/short equity strategies, global macro strategies, managed-futures strategies, event-driven strategies, and a multistrategy combination.
The proposed fund's managers would be Thomas L. Holliday, who is Titan's chief investment officer, Michael Mecca, and Patrick Campo.
Increasingly, hedge fund managers and traditional fund managers alike have been launching alternative mutual funds as they have seen flows out of hedge funds of funds. Instead, hedge fund investors now are more interested in products with greater transparency and regulation--precisely what they get in a 1940 Act structure.
Fund of funds strategist Josh Charlson, senior fund analysts Greg Carlson and Gregg Wolper, and fund analysts Flynn Murphy and Robert Goldsborough contributed to this report.
Morningstar Fund Analysts does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.