Sentinel Funds of Montpelier, Vermont has brought the portfolio management duties for its $35 million Sentinel Flex-Cap Opportunity Fund back home. Robert L. Lee, who also manages Sentinel’s Mid-Cap Growth Fund, took over Flex-Cap Opportunity on December 31, 2003. Fred Alger Management had been the subadvisor of the fund prior to the move.

Bud Scdaker, a spokesperson at Sentinel, cited cost savings as the main reason behind the decision to bring the Fund in-house. Sentinel estimates that the decision will shave 30 basis points off of the fund’s expense ratio.

He added that the conviction of Alger Management’s Vice-Chairman James Connelly played no role in the decision to change how the firm is advised. Connelly pled guilty in December 2003 to charges that he concealed evidence of improper mutual fund trading and was sentenced to one to three years in prison.

Sentinel hired Alger to subadvise the fund when it was launched because Sentinel lacked the capacity to manage the fund internally, explained Scdaker. He added that the firm has now developed that capacity.

Sentinel primarily taps its internal investment team for funds rather than hiring subadvisors. Of the sixteen funds offered by Sentinel, 13 are in-house and subadvisors manage three. Scdaker said Sentinel has no plans to bring the portfolio management of other funds in-house.

The funds are distributed by Sentinel Financial Services Company and sold primarily through four affiliated broker-dealers. 

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