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Tuesday, October 08, 2013

Morningstar's Don Phillips Diversifies His Life

Reported by Tommy Fernandez

So, Don Phillips is stepping away from his role as head of Morningstar's research group.

No, this is a good thing.

Phillips, who joined Morningstar in 1986 as the company's very first fund analyst and stepped in as chief executive for the company from 1998 to 2000, is remaining as a managing director and member of the board of directors.

But most importantly, he will be moving to a new position that will let him focus on creating ideas and new products, instead of managing an army of analysts all over the globe.

He described the move to MFWire in this way:

Well. This means a lot fewer people reporting to me. I'm doing this a [life] diversification. I'm going to do a few more things outside of work, and within work, this will allow me to focus on some new projects under development here. On new ways of connecting our research. It will allow me to focus on those things rather than the managerial aspects of my old job.

I think we are committed to providing great fund coverage, and I'm excited to be still a part of it. Personally, this is more of an asset allocation, a diversification. I will spend a little more time outside of Morningstar, take classes, etc., and get back to my liberal arts roots. Which will be a nice counterbalance to what I had been doing as a manager. I will be moving away from the managerial aspects that were a big part of my job. A lot of employees around the world and managing them required a fair amount of time. I will move to something that will be focused more on idea generation.

Phillips described these new projects as "new ways of connecting our research," for example developing toolsets that put together the equity, bond and credit analyses for clients.

For example, Morningstar, of course, provides research into any number of individual characteristics of specific securities, their credit situation, the strength of their fundamentals, the competitive motes enjoyed by the company, the fair value of their stock, what have you.

One project Phillips is working on will involve developing tools that will take all of these individual data streams and put them together into composite view of these characteristics for a basket or portfolio of these individual securities. For example, taking into account the credit situations, etc. of these individual securities, what will be the credit health of portfolio based on these securities?

And that's just for starters.

"These toolsets can be deployed to actively managed, as well as passively-managed funds. I am very excited to be working on the next generation of these tools," he told MFWire.

Meanwhile, Phillips' successor in the research head role, Haywood Kelly, has come up from the equity and credit side of Morningstar's research operations, more on the individually-focused research. but has managed the funds team before.

"He has done a great job with the team," Phillips said. "They have been doing some really terrific work."

Here is the press release:
Company Press Release

Don Phillips to Step Down as Head of Research for Morningstar, Haywood Kelly to Assume His Responsibilities in January 2014

CHICAGO, Oct. 8, 2013 -- Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today announced that Don Phillips will be stepping down as head of the company's Research group after the first of the year. Haywood Kelly, currently head of equity, credit, and structured credit research, will assume Phillips' responsibilities as global head of Research, effective Jan. 1, 2014. Phillips will be a managing director and remain a member of the board of directors. Both Phillips and Kelly will report to Joe Mansueto, founder, chairman, and CEO.

Mansueto said, "Don is a great friend and colleague. He joined Morningstar as our first mutual fund analyst in 1986, two years after I started the company. His passion for investing is the same today as it was 27 years ago. Don has worked tirelessly over the years, traveling the world to serve as an advocate for investors and share our thought leadership, with the goal of helping them make better decisions. Don has built a strong research team, and feels the time is right to make this life transition. I'm thrilled that he will stay with the company and continue to work closely with Haywood, focusing on new research initiatives."

Mansueto added, "Haywood is a 22-year veteran of Morningstar. He has led numerous key initiatives for us, including significantly expanding our equity research coverage, launching corporate credit ratings, and most recently, leading our structured credit unit. Haywood is a brilliant researcher and strong leader who is a natural fit for this role."

Phillips said, "I've had a wonderfully rewarding career and believe passionately in Morningstar's mission of helping investors. I've often said that, to me, Morningstar is a cause as well as a company. I told Joe that I'd like to step back, but I still want to contribute to Morningstar's success. He has always been incredibly supportive, and this time was no exception. Our global research team is second to none. Haywood has done a terrific job with our equity, corporate credit, and structured credit teams and has overseen our fund research in the past. He's an excellent choice for this role, and I look forward to continuing to work closely with him."

Kelly, 44, was named head of equity research in 1998, served as head of equity and fund research from 2000 to 2008, and became head of equity and credit research in 2009. He has also served as editor of Morningstar StockInvestor(R) and interim president of Morningstar Credit Ratings, LLC. Most recently, he also took on responsibilities for Morningstar's equity data area. He joined the company as a stock analyst in 1991. Kelly holds a bachelor's degree in economics from the University of Chicago, where he graduated as a member of Phi Beta Kappa. He also holds the Chartered Financial Analyst(R) designation.

Phillips, 51, joined Morningstar in 1986 and soon became editor of its flagship print publication, Morningstar(R) Mutual Funds(TM), establishing the editorial voice for which the company is best known. He helped to develop the Morningstar Style Box(TM), the Morningstar Rating(TM), and other distinctive, proprietary Morningstar innovations that have become industry standards. Phillips has served in a variety of leadership roles at Morningstar and has been a member of the board of directors since 1999.

About Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for individuals, financial advisors, and institutions. Morningstar provides data on approximately 433,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on nearly 10 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its registered investment advisor subsidiaries and has approximately $166 billion in assets under advisement or management as of June 30, 2013. The company has operations in 27 countries.

Caution Concerning Forward-Looking Statements

This press release contains forward-looking statements as that term is used in the Private Securities Litigation Reform Act of 1995. These statements are based on our current expectations about future events or future financial performance. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, and often contain words such as "may," "could," "expect," "intend," "plan," "seek, " "anticipate," "believe," "estimate," "predict," "potential," or "continue." These statements involve known and unknown risks and uncertainties that may cause the events we discuss not to occur or to differ significantly from what we expect. For us, these risks and uncertainties include, among others, general industry conditions and competition, including current global financial uncertainty; the impact of market volatility on revenue from asset-based fees; damage to our reputation resulting from claims made about possible conflicts of interest; liability for any losses that result from an actual or claimed breach of our fiduciary duties; financial services industry consolidation; liability related to the storage of personal information about our users; a prolonged outage of our database and network facilities; challenges faced by our non-U.S. operations; the availability of free or low-cost investment information; and liability and/or damage to our reputation as a result of some of our currently pending litigation. A more complete description of these risks and uncertainties can be found in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2012. If any of these risks and uncertainties materialize, our actual future results may vary significantly from what we expected. We do not undertake to update our forward-looking statements as a result of new information or future events.

(c)2013 Morningstar, Inc. All rights reserved.

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