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What does it mean for our artisan mutual funds? Will they be more interested in asset gathering,12b1 fees etc to satisy the parent company's shareholders?
A change like this could be quite disruptive to the organization. On the other hand, it may give employees a greater opportunity to participate in the success (or failure) of the company which would be good for the shareholders and hopefully their mutual fund clients. I'll be keeping a watchful eye on how things work out. Will there be more focus on meeting quarterly numbers to keep the street happy?
IMHO, Royce is the poster child for the downside of a shop being snapped up by a publically traded firm.
On the flip side, note that AMG has sizeable owndership of Tweedy Browne and Third Avenue, and both of those shops don't appear to have been compromised in their service to clients and commitment to their investing style. T. Rowe Price arguably does well enough in spite of being publically owned. Artio (ART) the jury is still out on. Is Loomis Sayles privately held?
And yet . . . Captial Growth Management (CGM) is privately held, I believe, and that didn't save Heebner from himself after his banner year in 2007. See, also, the recent negative buzz about Fairholme (a fair share of which I think is warranted).
In general, I prefer smaller, privately held firms that stick to their knitting. They're becoming a bit few and far between.
"flip side, note that AMG has sizeable owndership of Tweedy Browne and Third Avenue, and both of those shops don't appear to have been compromised in their service to clients and commitment to their investing style."
You didn't hear about the negative buzz around Third Ave when they instituted new retail class shares for their funds with higher expense ratios which frankly turned off a fair number of investors even though they personally grandfathered into the institutional shares. Were they not making enough money before?
T. Rowe Price is an interesting case --- Lowenstein blasted them in his book, "The Investor's Dilemma: How Mutual Funds Are Betraying Your Trust And What To Do About It"
I've got $ only in Art. Int. Value (Artkx) with the shop, so it should be pretty easy to tell if they go craven on their longer-term shareholders: if they reopen Artkx and let the assets pile up well beyond where they've closed it before, say $5-6 billion, or raise the ER significantly, I'll be, sadly but not at all ambivalently, outa there.
Comments
On the flip side, note that AMG has sizeable owndership of Tweedy Browne and Third Avenue, and both of those shops don't appear to have been compromised in their service to clients and commitment to their investing style. T. Rowe Price arguably does well enough in spite of being publically owned. Artio (ART) the jury is still out on. Is Loomis Sayles privately held?
And yet . . . Captial Growth Management (CGM) is privately held, I believe, and that didn't save Heebner from himself after his banner year in 2007. See, also, the recent negative buzz about Fairholme (a fair share of which I think is warranted).
In general, I prefer smaller, privately held firms that stick to their knitting. They're becoming a bit few and far between.
You didn't hear about the negative buzz around Third Ave when they instituted new retail class shares for their funds with higher expense ratios which frankly turned off a fair number of investors even though they personally grandfathered into the institutional shares. Were they not making enough money before?
T. Rowe Price is an interesting case --- Lowenstein blasted them in his book, "The Investor's Dilemma: How Mutual Funds Are Betraying Your Trust And What To Do About It"
No, was not aware of the 3rd Ave situation.
Yes, was aware of Lowenstein's comments (the general tenor of his comments); but I think TROW does pretty well all in all. So does Oakmark.
My ideal fund company is described above.
If we see a rash of buyouts of fund/asset managers, I might just go all-in with Vanguard.
http://news.morningstar.com/articlenet/article.aspx?id=376353
No one said they are gonna sell now. Only watch how things unfold.