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Friday, October 5, 2012

Managers Goes No-Load

Reported by Chris Cumming

Managers Investment Group, the mutual fund arm of AMG, plans to convert the 34 funds in its $20 billion family to a no-load share structure. The change will take effect by November 30.

At the same time, the mutual fund firm will close two funds.

Managers Investment Group COO and CIO Keitha Kinne told the MFWire that the share-class move was intended to "streamline our share class structure and make the share classes more consistent across the whole family."

She said that the change was made necessary by Managers' policy, when acquiring funds, of maintaining the acquired funds' class structure for the convenience of the investors. Eventually, Kinne said, that resulted in a "confusing" mix of class structures across the fund family that this move will address.

Another reason for the change is that Managers execs have recognized that "in our fund family, far fewer sales take place with a load anymore," said Kinne. "The vast majority of our sales take place on a wrap arrangement."

In addition to these changes, Managers will close the $13.8 million Managers AMG Chicago Equity Partners Mid-Cap fund and the $9.4 million Managers Cadence Focused Growth fund.

"When we went through our review, these were two funds that we determined were not of sufficient size to be viable in the long term," said Kinne.

Managers plans to eventually adopt a three-class share structure across the entire family, comprising an institutional class; a service class, available on a transaction-fee platform and with fees 10 to 25 basis points higher than institutional class; and an investor class, available on no-fee platforms and with fees 25 to 40 bps higher than the institutional class.

As part of the change, existing B and C class shares will be converted to investor class, with corresponding reductions in fees for C class shares.

Of the family's 34 funds, Kinne estimates that 10 to 15 funds are already in this three-class structure.

The Managers Investment Group family consists primarily of funds managed by firms owned in part by AMG. In April, Yacktman Asset Management became the latest addition to the AMG family.  

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