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Vulcan Fund Closure

edited May 2015 in Fund Discussions
FYI: (In case you missed the E-Mail)

Dear friends,

One of the most frequent requests from readers has been to provide timely notification of events that cannot wait until our normal monthly update. That seems reasonable. Our plan is to provide updates to you folks but only if the information is timely and compelling.

The imminent closure of Vulcan Value Partners (VVPLX) meets those criteria. In April, Vulcan announced the closure of VVPLX and all of their related strategies without advance notice. That’s an entirely prudent and shareholder-friendly decision, so we had no opportunity to warn you in advance of the closure. We reported in our May issue:

Vulcan Value Partners (VVPLX) has closed to new investors. The firm closed its Small Cap strategy, including its small cap fund, in November of 2013, and closed its All Cap Program in early 2014. Vulcan closed, without advance notice, its Large Cap Programs – which include Large Cap, Focus and Focus Plus in late April. All five of Vulcan Value Partners’ investment strategies are ranked in the top 1% of their respective peer groups since inception.

Presumably persons with an interest in the fund objected to the abrupt closure. Vulcan filed an amended statement with the SEC, announcing the fact that the fund would now be closed on June 1, 2015.
Effective as of the close of business on June 1, 2015, the Fund will close to new investors, except as described below. This change will affect new investors seeking to purchase shares of the Fund either directly or through third party intermediaries. Existing shareholders of the Fund may continue to purchase additional shares of the Fund.

Vulcan Value and its sibling Vulcan Value Partners Small Cap (VVPSX, closed) are both very good funds. Morningstar has awarded five stars to each fund. MFO’s rating system, which is considerably more sensitive to risk and rewards consistency, gives both of them our top honor, Great Owl funds, which means their risk-adjusted performance exceeds their peers’ in every applicable trailing period greater than 12 months. Since inception, VVPLX has outperformed its large-growth peer group by about 3% per year with substantially less risk.

Our original 2011 profile of VVPSX quoted manager C.T. Fitzpatrick’s self-assessment: “We buy 900-pound gorillas priced like 98-pound weaklings. We have a five-year time horizon. Usually, our investments are out of favor for short-term reasons but their long-term fundamentals are sound.” During Mr. Fitzpatrick’s 17 year tenure with Southeastern Asset Management and the Longleaf Funds, his team was ranked in top 5% of money managers over five, ten, and twenty year periods according to Callan and Associates. He runs a compact portfolio of about 40 names, a third of which are mid-cap stocks. While they do not always hold their investments for five years (price appreciation sometimes requires them to move on), their standard is straightforward: if they aren’t comfortable with the idea of holding a stake in a firm for five years, they won’t buy it.

Interested parties might want to (quickly) review the Vulcan Value Partners website for details.

A second fund closure is also imminent: effective June 1, 2015, the T. Rowe Price Health Sciences Fund (PRHSX) will be closed to new investors. The $14 billion fund has substantially outperformed its peers under manager Taymour R. Tamaddon, who joined in February 2013: $10,000 entrusted to him on the day he took over the fund has grown to $21,600 while the average health care manager would have grown the investment to $20,000. The problem, of course, is that Mr. Tamaddon follows Kris Jenner’s phenomenal run as manager. With Mr. Jenner’s departure, Morningstar ceased analyst coverage of the fund. Nonetheless, it has had two-plus very solid years under Mr. T. and sports Price’s trademarks: low expenses, risk consciousness and consistently solid performance. As with Vulcan, you might want to do a quick review of the fund’s webpage.

As ever,


  • Thanks, David, for the heads up!
  • Yes Thanks for the heads up. I just tried to buy the T. Rowe Price fund PRHSX though Schwab and am locked out (a TRP policy). Any comments on whether it's worth it to open a TRP acct. to do so or is there a substitute for this asset category. TIA
  • @ MFO Members: Guess what was up today ?
  • @jeffdiver1,

    I think it is worth the effort. That fund is and has been a top notch fund for the sector. It should do very well over the long haul.

    Now the question might be, can you get the account open in time?
  • edited May 2015
    I was able to purchase VVPLX earlier this week for the required minimum in my non-taxable account with Scottrade for no trade fee with no hassle (already own VVPSX in the same account).

    I was not able to buy VVPLX through Wellstrade/Wells Fargo as it had a "hold/sell". Rep. kept stating the same thing. Fido had it listed available for $2,500.

    Incidentally, M* posters are clamoring for some type of dedicated thread for opening/closing/limited access to funds similar to that of MFO.

    I want to give thanks to ViveBene for his post in the M* link above!
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