Arnhold Ponders How First Eagle Can Provide Income
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Wednesday, February 29, 2012

Arnhold Ponders How First Eagle Can Provide Income

This year First Eagle [profile] launched its first ever fixed income fund, but don't expect the New York City-based value mutual fund specialists to crank out a whole suite of such products. In an exclusive interview with, First Eagle chairman and chief investment officer John Arnhold put the new fund into perspective. He remains cautiously open to new product possibilities.

"Our clients are asking us over and over for income," Arnhold said. "We have been thinking about how we can provide income for our clients We've been mulling it over for quite some time."

"I would not rule out the possibility of something new in the future," Arnhold added, though he declined to give any details on what other types of income-generating investment offerings the First Eagle team might consider. "It could be some time before we decide to launch another product."

Arnhold insisted that he's "not looking for another high-yield product," nor for a more traditional, core fixed income product.

"We don't have a strong belief that it is a good way to preserve purchasing power over time," Arnhold said of core fixed income.

As for the new fund, the First Eagle High Yield Fund [see, 2/17/2012], Arnhold noted that the First Eagle team has "episodically invested in high yield securities" in the past.

"Our firm has always really been focused on protecting clients' assets and preserving capital over the long-term, and trying to preserve purchasing power," Arnhold said, comparing the strategy behind the new fund to First Eagle's equity-based, value-oriented approach. "For us, a high yield product is really not that different. It's really a natural extension of what we do."

Arnhold praised the new fund's PM team, Dwight Asset Management alums Edward Meigs and Sean Slein, focusing on absolute returns, not benchmarks.

"It's rare that you find a team where they really are focused on preserving capital over time," Arnhold said. "We are opportunistic in the sense that we find good people with a strategy in which we ourselves would invest."

"We're very serious about our vision," Arnhold added. "In many ways, it's business as usual here. We are trying to steward our client's assets."

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