The Tweedy, Browne Value Fund is scheduled to re-open on May 15, 2007, after being closed for two years. The fund originally closed to new investors in May of 2005 due to the concern that that allowing new investors into the
Funds could dilute the returns of existing shareholders.
The Managing Directors of Tweedy, Browne Company LLC, the investment advisor and distributor to the
Tweedy, Browne Funds, have reported to its board of directors that it will re-open the Tweedy, Browne
Value Fund on May 15, 2007. Will Browne, one of the managers of the Fund, indicated that the addition of
new assets to the Tweedy, Browne Value Fund could be managed effectively, without the risk of diluting the
returns of existing shareholders. “The Fund’s cash position over the past two years has been reduced
considerably and the Fund’s recent mandate change allows more flexibility and a wider selection of stocks to
consider for investment as the Fund now can invest more than 20% of its assets outside the United States,”
Mr. Browne said.
“With approximately $533 million in Fund assets, it will take only a $16 million investment to reduce cash
by 3%. With current cash levels below 10% and having most of the world’s stock markets available for
investment, we should be able to invest excess cash effectively and accommodate new cash flows as they
occur,” added Tom Shrager, another Fund manager.
Both the Tweedy, Browne Value Fund and the Tweedy, Browne Global Value Fund were closed to new
investors in May 2005 as the firm’s Managing Directors were concerned that allowing new investors into the
Funds could excessively dilute existing Fund shareholders’ investments in an environment that offered a
limited number of cheap stocks. While management admits that the investment environment is still
somewhat difficult, they feel confident that the Fund can handle additional inflows at this time.
However, Mr. Browne added, “If excessive new flows into this Fund inhibit our ability to effectively manage
it, we will not hesitate to close to new investors again.”
Tweedy, Browne Global Value Fund to Remain Closed to New Investors
The Tweedy, Browne Global Value Fund (TBGVX) will remain closed to new investors for the time being.
The Fund’s management feels that the Fund’s great popularity and its potential for large cash inflows could
potentially result in a buildup of the Fund’s cash position. Additionally, with this Fund’s more limited focus
on stocks primarily outside of the United States, management indicated that it has less of an available
opportunity set as compared to the Tweedy, Browne Value Fund, which can now choose from a universe of
both U.S. and non-U.S. stocks. Management noted that there are also several existing portfolio positions in
the Global Value Fund that are trading close to its estimates of intrinsic value and could be a source of new
cash in the near future. There are also some portfolio holdings that have recently been announced as
acquisition targets, which may result in an increase in the Fund’s cash position, assuming these announced
transactions are completed.
May 9, 2007 TWEEDY, BROWNE FUND INC.
Mr. Browne stated, “With over $8.6 billion in assets, it will require an investment of approximately $261
million to reduce the Fund’s cash position by 3%. Clearly the size of these dollar amounts has an influence
on our decision to remain closed for the time being in an environment that is still not awash with cheap
Mr. Browne continued, “We are encouraged that cash levels in the Tweedy, Browne Global Value Fund have
come down considerably from peak levels in 2005. However, we still feel that it is prudent to limit the level
of new cash flows into the Global Value Fund for the moment and not run the risk of potentially diluting the
returns for our existing shareholders. As the investment environment improves and the level of cash is
reduced further, we hope to be in a position to take on new investors in this Fund.”
Some facts about the Tweedy, Browne Company LLC
Tweedy, Browne Company LLC is a registered-investment advisor whose value method of equity investing
derives directly from the work of the late Benjamin Graham, author of Security Analysis (1934) and The
Intelligent Investor (1973). Founded in 1920 and serving originally as a broker to Benjamin Graham’s
investment management firm and to other well known value investors, the firm began managing money on a
discretionary basis for investors in 1968. As of April 30, 2007, Tweedy, Browne managed approximately
$14.9 billion in domestic, international, and global equity portfolios for both individuals and institutions,
including the Tweedy, Browne Value Fund and the Tweedy, Browne Global Value Fund.
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