Vanguard Awards Billion Dollar Mandate
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Thursday, December 11, 2003

Vanguard Awards Billion Dollar Mandate

Hotchkis and Wiley Capital Management has won a sizable subadvisory mandate from The Vanguard Group as the Valley Forge, Pennsylvania-based fund firm awarded a spot in its $25 billion Windsor II Fund.

Bob Dochterman, national sales manager at Hotchkiss & Wiley declined to comment on the award and referred inquiries to Vanguard, which released a press statement. Vanguard officials were not immediately available to comment on the search process.1

The award takes effect December 11, 2003 and could amount to as much as $1.25 billion in new assets for the Los Angeles-based Hotchkis and Wiley. Prior to the mandate it claimed $7 billion in assets under management. The mandate will be funded from the fund's cash position and a small portion of the other subadvisors current mandates, said Vanguard officials.

Hotckiss & Wiley will be one of five investment advisors to the large-cap value fund and will initially manage approximately five percent of the fund's assets, according to Vanguard officials. The four incumbent investment advisors to the fund are: Barrow, Hanley, Mewhinney and Strauss; Equinox Capital Management; Tukman Capital Management; and the Quantitative Equity Group of The Vanguard Group.

"The addition of Hotchkis and Wiley to Windsor II's investment advisory team brings the talents, culture, and focus of another excellent value advisor to the management of Windsor II's investment portfolio," said Vanguard Chairman and CEO John J. Brennan in a statement. "Like Windsor II's other managers, Hotchkis and Wiley has a deep, experienced, and disciplined team of value investors, yet their approach produces a portfolio different from those of the fund's other managers. We expect that the fund will benefit from this further diversification of its overall portfolio and investment strategy, without sacrificing potential return," said Brennan.

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