Barrow, Hanley, Mewhinney & Strauss "will assume leadership of" Pacific Financial Research "effective on or about Jan. 1," according to an announcement today by Old Mutual Asset Management, parent of both firms.
The "reorganization" follows decisions by James H. Gipson, Michael C. Sandler and Bruce G. Veaco — the three senior members of a six-man portfolio management team overseeing more than $17 billion in mutual fund and institutional assets at PFR — to leave the firm at the end of this year. Mr. Gipson is president, CEO and a principal at PFR; Mr. Veaco is CFO; and Messrs. Veaco and Sandler are vice presidents and principals. Consultants say the three veteran portfolio managers had declined to sign a new contract with Old Mutual when their old contract expired in 2004. They had assured consultants that they would remain with the firm.
Neither Mr. Sandler nor James Barrow, principal and co-founder of Barrow Hanley, returned calls seeking comment. Old Mutual spokesman Tucker Hewes declined to elaborate on the firm's press release. He couldn't immediately say if PFR will remain a separate money management firm, or whether its $17 billion in assets will simply be absorbed by the $51 billion Barrow Hanley.
Analysts said non-compete agreements would prevent Messrs. Gipson, Sandler and Veaco from setting up a money management firm investing with the same concentrated value strategy they handled at PFR, but would not necessarily rule out a different strategy such as a hedge fund.
Michael Rosen, a principal with pension consultant Angeles Investment Advisors, said PFR is a big firm in terms of assets but small in terms of the number of important people on staff. The loss of three heavyweights obviously calls for an "official review" on behalf of Angeles clients for which PFR manages money, Mr. Rosen said.
One consultant, who declined to be identified, said a review isn't needed: "We're out," he said.