As described in its second quarter portfolio review Seafarer Growth & Income is changing its stripes and today announced that two of its Co-Portfolio Managers are becoming, in essence, Co-Lead Portfolio Managers. One of these new lead managers (personally, I don't understand the concept of three lead managers) will be responsible for Value investing, while the other tackles Growth, leaving the formerly sole lead manager in charge of the big middle (along with the remaining Co-Portfolio Manager, I suppose). There is a lengthy discussion of how this will or won't affect the management of the fund going forward. As an investor I'm afraid I find this a bit of a muddle, possibly driven by significant redemptions. I've never owned a mutual fund that came out and said "we're fundamentally changing the way the fund operates." Seafarer has always had thorough shareholder communications and true to form, today's disclosure is very transparent and informative.
Comments
Mr. Foster argues, for what interest it holds, that this is not a fundamental change. I've outlined his argument, as best I understand it, below. The shortest version: the portfolio has always been comprised of value, core and growth stocks. Traditionally, core - the steady Eddies of the EM world - have dominated. As the EM space has evolved, there's less of a premium on their steadiness and more attractive opps in distinctly growth and value plays. To exploit that, he's going to allow a bit more of the portfolio to be invested non Steady Eddy names.
His argument is that the change preserves the ability of the fund to maintain its role as a defensive investor in the EMs.
Both Mr. Espinosa and Ms. Song strike me as having sterling credentials (Thornburg, Matthews, Legg Mason, Citigroup) and it strikes me as "a very Seafarer thing" for Mr. Foster to recognize and reward their performance. There were a reason he never imagined having an eponymous fund: "it's not all about me."
For what that's worth,
David