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Rating:A Texas Fund Firm Slims Down By 60 Percent Not Rated 0.0 Email Routing List Email & Route  Print Print
Wednesday, February 17, 2016

A Texas Fund Firm Slims Down By 60 Percent

News summary by MFWire's editors

A publicly-traded mutual fund shop in Texas is shrinking its workforce, outsourcing back-office work, and looking to smart beta as it restructures.

Frank Holmes
U.S. Global Investors
Chief Executive, Chief Investment Officer
On Friday San Antonio-based U.S. Global Investors revealed a net loss of $0.14 per share for its fiscal Q2 2016 (ended December 31, 2015), up year-over-year from a net loss of $0.05 per share. Yesterday on U.S. Global Investors' fiscal Q2 2016 earnings call (as transcribed by Seeking Alpha), CEO and chief investment officer Frank Holmes states that U.S. Global Investors' workforce has been "streamlined" down to 26 employees, from 65.

Kristen Mosbrucker of the San Antonio Business Journal reported on the restructuring at U.S. Global Investors. The paper notes that the fund firm has suffered an earnings drop "nearly every quarter since 2011 and blames the performance on increasing legal costs for regulatory compliance, bear market in emerging markets, and the low price for gold."

Holmes says on the call that U.S. Global has "been really truly challenged" in the last five years.

On the earnings call Holmes, U.S. Global Investors president and general counsel Susan McGee, and chief financial officer Lisa Callicotte talk about the restructuring and about the new partnership with Atlantic Fund Services. In December, Atlantic took over corporate governance service for U.S. Global Investors' funds, and McGee confirms that, "over the next two years," U.S. Global Investors "will move [the funds'] administrative and fund accounting services and their transfer agency services over to Atlantic Fund Services."

"We are very focused on streamlining for stability and growth, building our capability in the ETFs and realizing potential and where we think the markets are going," Holmes says on the call.

Holmes also spent part of the call talking up the lower expenses involved in running ETFs versus traditional mutual funds. So, watch for U.S. Global Investors to create more ETFs.

"We anticipate that we will be launching additional smart beta ETF products in 2016," McGee says on the call. 

Edited by: Neil Anderson, Managing Editor

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