(PUB) Investing 2015

544 / 772

14
Columbia Cuts the Cord With Marsico
Columbia funds ended its relationship with Marsico
Capital Management in November. It replaced
Marsico with in-house managers at Columbia
Marsico 21st Century NMTAX, Columbia Marsico
Growth NMGIX, Columbia Marsico Flexible
Capital CCMAX, and Columbia Marsico Focused
Equities NFEAX. The Marsico name was removed
from the fund names as well.
Columbia Marsico Growth is now Columbia Large
Cap Growth V, and it is run by John Wilson, Pete
Deininger, and Tchintcia Barros, who run Columbia
Large Cap Growth LEGAX. We have place the fund’s
Morningstar Analyst Rating under review. The former
Columbia Marsico fund will merge into Columbia
Large Cap Growth in the second quarter of 2016. The
former Columbia Marsico Focused Equities is also
slated to merge into Columbia Large Cap Growth.
It’s the final chapter in a very disappointing story for
Marsico, which was sold twice near the peak
in equities. The firm was sold with great fanfare to
Columbia parent Bank of America in 2000 for $1.1
billion. The firm’s assets under management grew
sixfold over the ensuing years, and Tom Marsico and
other investment professionals bought the firm
back from Bank of America in 2007. The firm borrowed
heavily to do so, and it has felt the weight of that
debt ever since. Since that buyout, the firm’s funds
have been consistent laggards and assets under
management have fallen sharply even before Columbia
fired them. Marsico has also seen some key managers
and analysts leave. The combination of departures
and performance slumps had led us to give Neutral
ratings to Marsico Growth MGRIX and Marsico
Focus MFOCX and drop the other funds from coverage.
We will update our ratings shortly.
Fund Manager Changes Fund News
Calamos Growth CVGRX Impact: Negative Date: 09/01/2015
Co-CIO Gary Black left Calamos three years after joining the firm. The situation is similar to that of Janus,
where Black arrived to fix a problem firm but left after a few years as both sides were ready to move on. Black
was one of five comanagers listed on the fund. Calamos added Michael Roesler to replace Black as the fifth
manager. Our Take: It isn’t pretty. Performance was mediocre over Black’s tenure, and his departure leaves a
void in upper management.
Fidelity Small Cap Discovery FSCRX Impact: Neutral Date: 03/14/2016
Chuck Myers will take a six-month leave of absence. Derek Jansen will fill in while he is gone. Jansen runs
Fidelity Small Cap Value FCPVX, where he worked with Myers before replacing him there. Our Take:
For a low-turnover fund, we don’t see much risk in Myers taking six months off. We will watch closely, though,
to be sure he comes back on time. Usually managers come back after leaves of absence and pick up right
where they left off, but occasionally they decide not to come back.
Janus High-Yield JAHYX and Janus Flexible Bond JAFIX Impact: Negative Date: 03/31/2016
Gibson Smith is leaving Janus. Comanager Darrell Waters will take over as lead manager. Our Take: We have
placed the funds under review as this is a big blow to two appealing funds. Smith built up Janus’ bond effort
over the past 12 years and was vital to the team.
MainStay ICAP International ICEUX Impact: Negative Date: 09/30/2016
Lead manager Jerry Senser will retire at the end of September 2016. The firm named Tom Cole co-chief
investment officer and said Matthew Swanson will step down to focus on U.S. strategies. Our Take: Senser
has led ICAP since Rob Lyons’ death in 2007. We’ve lowered our rating toˇ from ´.
Matthews Pacific Tiger MAPTX Impact: Negative Date: 09/09/2015
Comanager In-Bok Song left to work as an analyst at Thornburg. This follows Richard Gao’s departure in July
2015. Our Take: Although Song was not the lead, her departure along with Gao’s led us to lower the fund’s
rating to •. As the rating implies, we still think the fund is in good hands. Sharat Shroff has experience
and a track record at Matthews that inspires confidence. The fund recently reopened because of outflows
seen at most Asia funds.
Vanguard Energy VGENX Impact: Negative Date: 06/01/2016
Lead manager Karl Bandtel of Wellington Management will retire. Vanguard named Greg LeBlanc, also of
Wellington, comanager of the fund and said he will become the lead manager when Bandtel retires. Our Take:
Bandtel has a strong track record, so he will be missed. The fund is Under Review.
Vanguard Windsor II VWNFX Impact: Negative Date: 01/01/2016
Longtime lead manager James Barrow will retire. Comanagers Jeff Fahrenbruch and David Ganucheau will replace
him. The two have been comanagers since 2013, and eight years ago Vanguard had said they would eventually
succeed Barrow. Barrow will continue to manage Vanguard Selected Value VASVX. Our Take: We knew Barrow
would retire in the relatively near future, so this is not a surprise. Still, Barrow’s outstanding record makes this a
real loss. His replacements are seasoned but do not have long track records of their own. We have lowered our
rating to ´ from •.
Wasatch Small Cap Growth WAAEX Impact: Neutral Date: 02/01/2016
Jeff Cardon will step down as lead portfolio manager of this fund and CEO of Wasatch Advisors. He will
remain a comanager on the fund. J.B. Taylor will take over Cardon’s role as both CEO and lead manager
on the fund at that time. Our Take: This looks like a gradual evolution. We are maintaining our Πrating
but will watch closely to see how involved Cardon is. On the plus side, Taylor has a strong record, too.