After seeing assets in her minicap mutual fund surge by 20% in September, Irene Hoover is leaving Jurika & Voyles to set up her own firm.
Her resignation deals a major blow to the fledgling mutual fund effort of the Oakland, Calif.-based firm, which runs $7 billion, almost all for institutions. Assets of its three mutual funds total only $300 million, with $170 million in the Jurika & Voyles Mini-Cap fund.
As manager since the fund's inception three years ago, she trounced competitors and outperformed the Standard & Poor's 500 Stock Index.
Ms. Hoover plans to open her yet unnamed shop in San Francisco by mid-November, and launch a mutual fund by mid-January.
"The bottom line is I've always wanted to have my own place. This is the perfect time to do it," said Ms. Hoover. She declined to say how she was financing the venture.
Jurika & Voyles President Karl Mills said a team led by Guy Elliffe and Paul Meeks will take over Ms. Hoover's fund.
Mr. Elliffe, with 17 years of investment experience, has been with the company since 1995 and is one of three members of the investment committee. He has been responsible for research for the financial industry.
Mr. Meeks, who has seven years of investment experience, directs the research department.
Mr. Mills said they will continue to use a value strategy, but with a slightly higher market cap than before, focusing on companies in the $400 million to $800 million range.
In contrast, 65% of current holdings had market caps below $500 million at the time they were purchased.
The fund also will hold fewer stocks for longer periods, he said, with an aim to reduce the number of names to between 60 and 80 from Ms. Hoover's 120 to 150.
Ms. Hoover's departure understandably worries shareholders, who have enjoyed a 39.90% rise in the Mini-Cap fund in the year ended Aug. 31, vs. a 40.65% rise for the S&P 500 and 28.95% for the Russell 2000 index, a small-cap benchmark.
Over the three years since it was started Sept. 30, 1994, the fund has had an average annualized return of 43.08%.
Comparable figures for the period ended Aug. 31, the latest available, were 26.58% for the S&P 500 and 19.96% for the Russell 2000.
Analyst Bill Rocco of Chicago-based Morningstar Inc. thinks the change could increase Jurika & Voyles' clout with investors.
"People who like Jurika & Voyles might buy the small-cap fund" rather than a mini-cap fund, which "sounds like it's too quirky," he said. But it could take six months for the new team to win over investors, he said.
An overwhelming majority of Jurika & Voyles' $7 billion in assets is managed under a team approach, with analysts covering specific industries and portfolio management teams carrying out their recommendations.
"We want to bring the fund in line with the way we've managed the other $7 billion in assets," Mr. Mills said.
"We're focusing on our strength, which is research. . . . We have an incredibly talented group of analysts."
Crain News Service