Morningstar Advisor - February/March 2011 - (Page 58)

Undiscovered Manager Leaving the Nest By Bridget B. Hughes Three years after departing First Eagle, Charles de Vaulx and company are thriving on their own. In just longer than three years, International Value Advisers has amassed more than $13 billion in assets under management. That’s quite a feat for a firm, known as IVA, that invests primarily in equities, considering the rough-and-tumble markets that investors have endured during that period. Its asset figure puts IVA among the 100 largest mutual fund families. Thus, it would be stretching it to call the firm “undiscovered,” especially considering that one of its top investment people, Charles de Vaulx, is fairly well-known among investors—thanks in part to his many years managing funds at First Eagle, both in partnership with value-investing legend Jean-Marie Eveillard and on his own. During those years, de Vaulx established close relationships with many clients and shareholders, who appreciated his candor. Still, IVA isn’t a household name. And while you may think you know the firm’s strategy and management well, there’s more to tell— including the fact that the firm will close its doors to investors on Feb. 18. Nimble Is a Sticking Point In some sense, IVA was born out of necessity. In 2007, a group of senior managers and analysts left First Eagle. Leaving were de Vaulx; Chuck de Lardemelle, who was First Eagle’s director of research; Simon Fenwick, analyst and once manager of First Eagle Gold SGGDX; and analysts Thibaut Pizenberg and Michael Malafronte. While the reasons for their departures were varied (not surprisingly, 58 Morningstar Advisor February/March 2011

Table of Contents for the Digital Edition of Morningstar Advisor - February/March 2011

Morningstar Advisor - February/March 2011
Letter From the Editor
First, Do No Harm
Do You Use Active or Passive Investment Strategies?
Best of Both Worlds
How to Build an Index
Accountable Investor
Nice Guys Finish First
Four Picks for the Present
Investment Briefs
A New Guardrail Against Risk
Tech Loosens the Purse Strings (a Bit)
It’s More About Costs Than Active or Passive
Play Your Stars
In Between Active and Passive
Selling Beta as Alpha
The Weighting Game, and Other Puzzles of Indexing
Leaving the Nest
Redefining Credit Risk
Another Vote for Market-Based Credit-Risk Measures
Big Opportunities in Small-Cap Stocks
Benchmarks? What Benchmarks?
Mutual Fund Analyst Picks
50 Most Popular ETFs
Undervalued Stocks With Wide Moats
VA Sales Slide, but Assets on the Rise
Indexing’s Lunatic Fringe

Morningstar Advisor - February/March 2011