TCW Gundlach Update: 30% of MBS Team Has Resigned
December 10, 2009
Dear Valued Clients,
I am writing to update you about developments stemming from our December 4 announcement concerning Metropolitan West Asset Management (MetWest). We believe this combination provides TCW with the continuity required to ensure stability in managing our clients’ high-grade fixed income assets.
Over the weekend, key MetWest professionals assumed portfolio management responsibilities for all of TCW’s high-grade fixed income client accounts. This transition has been orderly and seamless, a testament to the professionalism and enthusiasm of both MetWest and TCW employees.
Attached please find a complete list of our high-grade fixed income products and the respective portfolio managers, effective today. We expect you will notice a more collaborative, team-based approach to portfolio management. We believe this culture of cooperation will facilitate a quick, effective integration of our fixed income teams into a single unit.
We are partnering with a firm that promises to add “skill for skill” and mirrors our investment style, discipline and approach. After working intensively with MetWest CEO David Lippman and his team over the weekend to ensure an orderly transition, I remain convinced that this is the right team to manage our high-grade fixed income portfolios.
We anticipated possible resignations as a result of this announcement. However, as of today, we have retained 70% of our mortgage-backed securities team.
We have added 27 professionals from MetWest to our high grade fixed income team, including nine professionals dedicated to mortgage-backed securities. This gives us a staff of more than 50 dedicated to mortgage-backed securities, asset-backed securities and other structured products. All of our risk, management and trading systems are fully functional. The developers who created our proprietary analytical systems remain with TCW. The MetWest team that joined us has significant experience in mortgage-backed securities, with more than half of its nearly $30 billion in assets invested in MBS and a track record in the asset class dating from the firm’s inception in 1996.
I want to assure you that your investment with TCW is being managed with the same focus and rigor. We look forward to speaking with you soon about your investments with TCW and we especially look forward to an opportunity to introduce you to our new Fixed Income team.
Marc I. Stern
Chief Executive Officer
The TCW Group, Inc.