Vanguard Group hired Alliance Capital Management as subadviser for the $12 billion Vanguard U.S. Growth Fund and for some variable annuity assets, effective today. Lincoln Capital Management, which had managed the fund since 1987, was terminated. The subadvisory deal represented 18.7% of Lincolns $64.2 billion in total assets under management as of Dec. 31.
"Lincoln Capital Management has served the funds shareholders capably, and we thank them for their service and their dedication to our shareholders over the past 14 years. We believe that the team at Alliance is well-structured to serve the funds shareholders in the future, John J. Brennan, Vanguard chairman and CEO, said in a statement on the companys website. John Demming, a spokesman for Vanguard, declined to further explain the reasons for the termination, beyond noting that the funds board "made the decision in the best interest of shareholders.
A statement issued by Lincoln said: "Lincoln Capital has for 34 years consistently adhered to a pure growth philosophy in managing its clients assets. Vanguard determined that the U.S. Growth Fund shareholder would be better served through a more conservative investment approach than our institutional product, which emphasizes style purity.
The U.S. Growth Fund included $7.7 billion managed for defined contribution plans as of Dec. 31, according to P&I data.