Assets under management at Tradewinds Global Investors LLC are down more than two-thirds since the announcement in March that star money manager David Iben was leaving.
Tradewinds data show the company was managing $10.3 billion as of Sept. 30, compared with $38 billion at the end of February, two weeks before Mr. Iben, the firm's chief investment officer, announced he was leaving.
Consultants say two factors are primarily at work: Mr. Iben's strong identification with Tradewinds, and a heavy reliance on natural resources stocks that have underperformed in recent months.
Performance-wise, the firm ranks at the bottom of the heap among value managers.
Its asset collapse also has wider implications for Chicago-based Nuveen Investments, Tradewinds' parent.
Nuveen, which is made up of seven boutique investment affiliates, had more than $220 billion in assets under management as of Sept. 30. Tradewinds was among the most profitable units, several informed sources say. It was second in AUM among the seven affiliates before the outflow, behind Nuveen Asset, which has more than $100 billion, the sources said.
But while Nuveen Asset Management is oriented toward fixed income, Tradewinds is an equity shop, with average fees double those for fixed income.
Parent Nuveen has been struggling with its overall debt load, which increased to $4.5 billion from $4.1 billion following a debt restructuring in September.
The debt resulted from Madison Dearborn Partners LLC, Chicago, taking the company private in a leveraged buyout in 2007.
The company, however, now faces a new debt maturity wall of $3.1 billion in 2017.
“It will be difficult to earn their way out of this debt load,” said Rory Callagy, an analyst with Moody's Investors Services, New York.
Mr. Callagy said company officials can do an initial public offering that would raise cash to pare debt, or another financing if an IPO isn't feasible.
The September refinancing was Nuveen's fourth since the LBO.
Nuveen spokeswoman Kathleen Cardoza said no one at Nuveen or Tradewinds would comment.