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In October
2015
, Brian Rogers will step down from his
role of managing
T. Rowe Price Equity Income
PRFDX
. Rogers will be
60
years old when he retires.
In
2016
, firm
CEO
James Kennedy will retire at the
age of
62
. This is pretty standard practice at T. Rowe
Price. Preston Athey retired from
T. Rowe Price
Small-Cap Value
PRSVX
at age
64
. Typically, portfolio
managers retire in their early
60
s. That’s older than
at some firms and younger than at others.
It gives us a good idea for when a manager might
retire in the future. And from the looks of it, there
will be some big shoes to fill around
2018
should
managers continue retiring around age
60
. This could
be a challenge as T. Rowe Price has suffered some
key defections from younger managers who might
have been elevated to a bigger role. The firm lost Joe
Milano of
T. Rowe Price New America Growth
PRWAX
, Kris Jenner of
T. Rowe Price Health
Sciences
PRHSX
, and Rob Bartolo of
T. Rowe Price
Growth Stock
PRGFX
.
T. Rowe Price funds are very much team efforts, as
analysts, comanagers, and investment committees
support the lead manager. Still, the lead manager
is crucial to the fund’s success. Looking at the ages
of some of the firm’s top managers, there are four
plus one group head who turn
60
in
2018
.
Brian Berghuis of
T. Rowe Price Mid-Cap Growth
RPMGX
is a past Morningstar Fund Manager of the
Year winner. This
$26
billion fund has a Morningstar
Analyst Rating of Gold thanks to his remarkable
record and clear strategy. Berghuis works closely
with the rest of the growth team, but taking over
a mid-growth fund this big will be quite a challenge
for his successor.
Mark Vaselkiv has done an outstanding job at Silver-
rated
T. Rowe Price High-Yield
PRHYX
. He has the
assistance of two comanagers and
12
analysts.
Greg McCrickard has been a steady hand at
T. Rowe
Price Small-Cap Stock
OTCFX
for more than
20
years. The Silver-rated fund has consistently outper-
formed. He taps the work of T. Rowe’s equity analysts
and has the help of associate portfolio manager
Frank Alonso. The fund is closed to new investors.
Dan Shackelford has made
T. Rowe Price New
Income
PRCIX
a standout. The Silver-rated fund has
done a fine job mixing caution with aggression
to provide a nice return without extreme downside.
Shackelford draws on the input of six sector
managers in fields such as corporate bonds, emerging
markets, and high yield. Thus, it could be fairly
said this is even more of a team effort than most T.
Rowe funds. Shackelford also has the help of two
dedicated quantitative analysts.
Rich Whitney is not a named manager but heads T.
Rowe Price’s asset-allocation effort.
How T. Rowe Price Handles Manager Changes
T. Rowe Price does a fine job handling manager
changes, so don’t jump the gun on these funds. With
retirements, the firm typically has a long lead time
and shares that information with shareholders. It
announced Rogers’ and Athey’s retirements along
with their replacements nearly two years in advance.
Internally, that gives the next manager plenty of time
to work with the team and get to know the holdings
in the portfolio.
For shareholders, it means we have time to assess the
changes well in advance. In addition, manager
changes at T. Rowe Price rarely mean a change in
strategies. We’ve seen tweaks at
T. Rowe Price
New Era
PRNEX
, but more commonly, you’d be hard-
pressed to spot a manager change just by watching
the portfolio.
K
Winds of Change at T. Rowe Price
The Contrarian
|
Russel Kinnel
Our Contrarian Approach
I go against the grain to
find overlooked funds that may
be ready to rally.