Morningstar Advisor - February/March 2012 - (Page 56)

Undiscovered Managers GoodHaven Realizes Its Vision By Kevin McDevitt The firm is stepping out of Fairholme’s shadow, thanks to a big-time investor. Life is rarely easy for startups, whether the business is managing money or creating the next social-networking app. Besides coming up with a compelling product or service, attracting capital is often the most difficult task. Fairholme FAIRX alums Larry Pitkowsky and Keith Trauner addressed that issue soon after they formed GoodHaven Capital Management, the advisor to GoodHaven GOODX, near the end of 2010. But Pitkowsky and Trauner faced the additional challenge of distinguishing themselves from one of the most iconic managers of the past decade, Fairholme’s Bruce Berkowitz. Launching a new firm is easier for some mutual fund companies than for others. The founders of Marsico, Causeway, Wintergreen, and DoubleLine all had track records at other shops before striking out on their own. That made it far easier to attract investor interest. DoubleLine, for example, has already collected about $14.6 billion in new money since April 2010, thanks to both manager Jeffrey Gundlach’s stellar 16-year career at TCW Total Return Bond TGLMX and to excellent short-term performance from flagship DoubleLine Total Return DBLTX. Without a public record of their own, Pitkowsky and Trauner largely started from scratch. They certainly contributed to Fairholme’s success from its 1999 inception through October 2010 as analysts, comanagers, and, finally, as consultants. During that time, the fund had the large-value category’s best return, 13.6% annualized versus 3.6% for the category median. 56 Morningstar Advisor February/March 2012

Table of Contents for the Digital Edition of Morningstar Advisor - February/March 2012

Morningstar Advisor - February/March 2012
Letter From the Editor
Make a Difference Stories, Not Debates
How Concerned Are You About Europe?
Analytical and Independent
What to Ask When a Fund Manager Leaves
Past, Present, Future
Have Financials Gotten Cheap Enough?
Four Picks for the Present
Investment Briefs
Tactical Funds Miss Their Chance
Specialty Retail: Ad Hoc Opportunity
How Europe Is Making Its Crisis Worse
Impact on U.S. Economy Will Be Minimal
European Banks: Bargains or Value Traps?
Don’t Count the Euro Out Yet
Europe on the Brink
GoodHaven Realizes Its Vision
How Index Trading Increases Market Vulnerability
Nonlisted REITS: Handle With Care
Safety Picks for the Many Moods of Mr. Market
On the Prowl for Large- Blend Index-Beaters
Our Favorite Mutual Funds
50 Most Popular ETFs
Undervalued Stocks With Wide Moats
The Math That Matters

Morningstar Advisor - February/March 2012