Eaton Vance Tags In For a Transforming Subadvisor
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Tuesday, November 03, 2015

Eaton Vance Tags In For a Transforming Subadvisor

An Eaton Vance [profile] team is taking over management of a formerly subadvised mutual fund as both the subadvisor and its founder change paths.

John Brynjolfsson
Armored Wolf
Chief Investment Officer
Effective this Thursday, Irvine, California-based Armored Wolf will no longer subadvise the two-star, five-year-old, $83.8-million Eaton Vance Commodity Strategy Fund. Eaton Vance spokeswoman Robyn Tice confirms that the Boston-based mutual fund shop's own global income group will take the reins of the fund from the Orange County hedge fund shop. The fund fell 16-percent this year, as of September 30.

The change at the fund comes as seven-year-old Armored Wolf itself is going through bigger changes. 51-year-old founder John Brynjolfsson ("Brynjo") (a former partner at Pimco) is shutting down the hedge fund, converting Armored Wolf into a family office to manage his own money, and joining James Alpha Advisors, another mutual fund shop that Armored Wolf has subadvised for. He will continue to co-PM the two-star, $17.8-million, two-year-old James Alpha Global Enhanced Real Return Fund alongside fellow Armored Wolf veteran Tim Alford, though he will no longer work with the Eaton Vance fund.

"He's working closely with us to transition management responsibility to Eaton Vance," Tice tells MFWire, adding that there will "be a subtle change" in the investment approach for the fund.

"Commodity exposure in mutual funds is generally gained via derivatives (either swaps or futures)," Tice adds in an e-mailed statement. "The Eaton Vance Global Income Group has built an impressive, industry-leading network of counterparties over many years, and we believe they may realize efficiencies on behalf of Fund investors relative to Armored Wolf with regard to gaining broad commodity exposure via derivatives."

Bloomberg (twice), the Orange County Business Journal, Reuters, and the Wall Street Journal all covered Armored Wolf's transformation. Though the shop once managed $1 billion in AUM, Brynjolffsson reportedly said that "the past year has been pretty horrendous" for some of Armored Wolf's funds and that some investors "have thrown in the towel."

"The five-year bear market in commodities has made the decision easier for me," Brynjolffsson told Bloomberg. "The asset management business is based upon scale, and at our scale, we just couldn't justify staying in business."

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