A departure from its usually cautious style of investing with a foray into the hedge fund arena cost Russell Investments. The WSJ reports that the company plans to shutter three under-performing hedge funds-of-funds following heavy losses. The funds that will be unwinding do not represent a significant chunk of Russell's total AUM, about $6 billion out of $211 billion, however the move into the alternatives space caused big waves at the firm.

Things at Russell have not been quiet of late. In June Craig Ueland, who had been president and CEO of the company since 2004, and an employee of the company since 1983, abruptly left the company. (see MFWire June 10, 2008) John Schlifske, executive vice president at Russell's parent company Northwestern Mutual stepped into Ueland's role while a search was conducted for his permanent replacement. The permanent replacement has not been named as of yet.

Russell told the WSJ that the executive situation was not related to the hedge fund situation. 

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