Vanguard Group hired ClearBridge Investments to subadvise a portion of the $11.9 billion Vanguard Explorer Fund, confirmed Vanguard spokeswoman Emily Farrell.
Vanguard also terminated Explorer Fund subadvisers Granahan Investment Management and Kalmar Investments after Vanguard’s trustees evaluated the companies. They were terminated due to factors such as investment process, staffing and performance.
Granahan CEO Jane White confirmed the termination in a phone interview.
“They’ve gotten rid of their boutique managers, of which we are one, and hired larger managers that can handle larger assets,” said Ms. White, adding, “We’ve been trying to diversify away from Vanguard … since I became CEO in 2011.”
Nancy M. Romito, Kalmar Investment Advisers client services director, could not be immediately reached for comment.
Following the transition, Explorer Fund, which seeks to identify small U.S. companies with growth potential, will allocate assets among five subadvisers: Wellington Management Co., 34%; Vanguard Quantitative Equity Group, 18%; ClearBridge, 15%; Arrowpoint Asset Management, 15%; and Stephens Investment Management Group, 14%; with the remaining 4% in equitized cash investments.
Kalmar and Granahan each previously managed 13% of the fund’s assets; Wellington, 34%; Arrowpoint, 15%; Stephens, 12%; and Vanguard Quantitative, 11%.
ClearBridge’s Jeffrey Russell, Derek Deutsch, Brian Angerame and Aram Green will serve as portfolio managers to the Explorer Fund.
The expense ratios for Explorer Fund’s investor shares and admiral shares are not expected to increase, and the investment objective and principal investment strategies for the fund will remain the same.
Vanguard managed more than $4 trillion in global assets as of Feb. 28.
