RS Investment Management has dropped San Francisco-based Elijah Asset Management as subadvisor to the $350 million RS Value + Growth Fund and the $125 million RS Information Age Fund. The funds' trustees made the decision not to renew the firm's subadvisory agreement which expired July 10 and replaced Elijah with its own portfolio managers. The decision marks the end of a long-term relationship for the funds.

The reasons for the split revolved around fundamental difference of opinion in overall business management, said a spokesperson for RS. Performance was one of the factors that had been considered, but not the only one.

Ron Elijah said that his firm is responding to growth that has required additional focus. "Elijah Asset Management plans to focus on its faster growing mutual fund partners and its alternative investment products," he explained in a statement. The implication seems to be that Elijah and RS had differing expectations from the relationship.

Elijah was a former employee of RS Investment Management and had been the manager for both funds since their inception in 1992 and 1995. He left RS in March of 1999 to form his own firm and retained his investment management duties as subadvisor to the funds. The subadvisory agreement had been last renewed in 1999.

"I regret that after my long history managing the RS Value + Growth Fund and The Information Age Fund that our business relationship with the Funds has come to an end," said Elijah.

Management of the funds will be taken over by a team led by John L. Wallace, currently portfolio manager of the RS MidCap Opportunities Fund and co-portfolio manager of the RS Diversified Growth Fund.

James L. Callinan and Stephen J. Bishop will take over the Information Age Fund. The pair currently manages the RS Internet Age Fund.  

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