Waddell & Reed on the block
From Wall Street Journal
Waddell & Reed Inc. is "discreetly shopping" itself, according to the paper, although it is reportedly in the early stages and no deal is imminent. Other asset management firms also showing their wares are Nicholas Applegate, with $45 billion under management, and Fayez Sarofim, with $44 billion in assets, according to the paper. The Kansas City-firm is a publicly traded unit of Torchmark Corp. and currently sports a market cap of $2.4 billion with about $41 billion in assets under management. The price of a transaction could be as high as $4 billion, Waddell & Reed differs from the others in that is has retained its own network of 2,600 investment advisers who sell the load funds. Its average account size is $47,000.

PainWebber's Marron takes fund manager role
From Wall Street Journal
PaineWebber Group Inc. Chief Executive Officer Donald Marron will receive up to $60 million in compensation as part of UBS AG's buyout, the paper reports. The bulk of the payment will be compensation for Marron acting as a run-of-the-mill portfolio manager rather than chief executive. The package will be spread over three years and includes a management fee for overseeing a private pool of money belonging to General Electric Co. He will most likely split these fees with a staff of as many as 10. He will also be eligible to receive 20 percent of earnings in the fund if its performance exceeds a specified target.

Cash flows sizzle
From TheStreet.com
Cash continues to flow into funds making July one of the top months in the industry's history, according to Trim Tabs. The Santa Rosa, California firm pegs flows at just under $20 billion through July 18, putting them on pace for $36 billion for the month. The record for flows was set in February at $32 billion. The sectors receiving the most funds are small-caps and international funds with strong flows also going to technology and health care.

Cramer wants more disclosure
From TheStreet.com
Hedge fund manager James Cramer calls for fund managers to treat their clients more like, well, clients of a hedge fund. Admitting that fund companies may not be able to afford handholding, Cramer says funds should inform investors of their top holdings on a daily basis. At a minimum they should "at least offer a recording, or do a conference call with investors, on a listen-only mode, that will tell them what you own," he argues. They should also provide "a rough approximation of what the tax bill should be" for investors. Finally, "you should have a manager who is willing to speak to investors after the market is closed."

How bad is bad performance?
From Wall Street Journal
How in this decade's bull market have funds with negative life-time performance track records survive? Lipper says 491 stock funds (6.5 percent of those it tracks) have suffered this fate. The paper takes a look at the matter. The worst performing fund is the Ameritor Industry Fund, which has a cumulative loss of 42.90% since 1959. Meanwhile, The U.S. Global Investors Gold Shares Fund has lost 87.8% since 1970. ProFunds UltraShort OTC Fund has declined 96.39% since its June 1998. Most of the laggards are commodity sector funds and emerging-markets funds. 

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