TCW's embattled Special Mortgage Credit Funds I and II will retain more than half of their assets, following the departure of the funds' co-portfolio manager, former Chief Investment Officer Jeffrey Gundlach, TCW spokeswoman Erin Freeman confirmed in an e-mail response to questions.
Of the 330 investors in the two funds, 199 with a combined $1.7 billion in assets have decided to stay. The remaining 131 investors opted to liquidate their combined $1.3 billion.
TCW fired Mr. Gundlach on Dec. 4, triggering a key-man provision that allowed investors to liquidate their investments in the funds. TCW offered incentives — lower management fees and an early closure of the fund — to urge investors to remain.
The manager had set a Feb. 19 deadline for investors to make a decision.
“Our clients' first priority — and ours — is to obtain superior returns on their investments,” according to a TCW news release issued today. “For the most part, investors who decided to liquidate believe that a fair amount of the mortgage-related opportunity in the funds has been realized. Liquidity needs and other business reasons specific to individual investors also played a role.”