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TCW Gundlach Update: 30% of MBS Team Has Resigned

Tyler Durden's picture
Submitted by Tyler Durden on 12/10/2009 18:31 -0500



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.

Sincerely,

Marc I. Stern
Chief Executive Officer
The TCW Group, Inc.

2.666665
Your rating: None Average: 2.7 (3 votes)

»


by Dr Horace Manure
on Thu, 12/10/2009 - 18:44
#159600

Sigh.  And this means what exactly?

No, never mind.  I don't really want to know.  Tomorrow will be another day of the same.

by Hammer59
on Thu, 12/10/2009 - 18:50
#159607

Define oderly and seamless. More like odorly.

by Green Sharts
on Thu, 12/10/2009 - 18:52
#159610

Add one more to the TCW departure list, whoever was responsible for attaching the old org chart that still has Gundlach and some of his departed lieutenants on it and doesn't include the incoming Met West people.

by Tyler Durden
on Thu, 12/10/2009 - 19:01
#159617

Especially for you: http://www.zerohedge.com/sites/default/files/MetWestFactSheet.pdf

by Green Sharts
on Thu, 12/10/2009 - 19:33
#159646

Did TCW really send out that old org chart attached to a letter announcing the changes?

by Anonymous
on Thu, 12/10/2009 - 18:55
#159612

http://www.rand.org/pubs/monographs/2009/RAND_MG819.pdf

-MobBarles

by Rainman
on Thu, 12/10/2009 - 18:58
#159615

Metwest has over $15B in MBS....over half their assets. Suspicious 'bout a partnership involving highly professional and timely shit-dumping ......er, high grade fixed income portfolios....???

by Anonymous
on Thu, 12/10/2009 - 19:02
#159618

Finally, a real news headline.
I really like coming here.

by McGriffen
on Thu, 12/10/2009 - 19:03
#159619

1234...I smell a turf war.  Marketing professionals best be girding their loins for a miserable stretch of weeks/months.

I just hope MWTRX doesn't go tanking...otherwise i mightn't care less

by Green Sharts
on Thu, 12/10/2009 - 19:42
#159650

In case you're interested, Tad Rivelle is having a webcast for TGLMX shareholders tomorrow (Friday) at 10 AM PST, 1 PM EST.

I'd guess he will talk about his general outlook for fixed income in addition to the issues specific to the marketing war between TCW and where ever Gundlach turns up in a month or two.

by Anonymous
on Thu, 12/10/2009 - 19:30
#159643

I cashed out of TGLMX last Monday. When a fund loses a manager like Gundlach, your money follows the manager, not the fund.

by albion402
on Thu, 12/10/2009 - 21:14
#159718

What other types of investments are in the Metwest portfolio?  Just curious.

by Anonymous
on Thu, 12/10/2009 - 22:56
#159790

What level of detail do you want?

You can go to MetWest and get a breakdown of all position at quarter end.
http://www.mwamllc.com/literature.php

Or go to Morningstar for a quick look and breakdown.
http://quicktake.morningstar.com/FundNet/Portfolio.aspx?symbol=MWTIX&country=USA

by just.a.guy
on Thu, 12/10/2009 - 23:48
#159814

The 30% of the people that left doubtless represents 99.7% of the talent.

by Assetman
on Fri, 12/11/2009 - 00:03
#159818

That's usually the case in investment management.

The Matwest CEO just let out a huge turd in the memo.  What he has now isn't "better"-- and he should know better than to suggest otherwise to investors.

They likely paid up to assemble a new team of professionals-- who are no doubt probably very good at what they do.  Still, I'd gather there still will be meaningful capital flight.  And the new team will be seriously under the gun to deliver.

by Anonymous
on Fri, 12/11/2009 - 08:23
#159957

As I see it MetWest is good at what they do. The type of assets that they traditionally manage will seek them at TCW. By the same token, the assets that had previously gone to TCW for Jeffrey will now follow Jeffrey once he's up and running, probably getting agency mbs beta from a nice plain vanilla Vanguard fund in the mean time.

Effectively all thats happened is that TCW is now MetWest albeit with more assets under management. And whatever Jeffrey rolls out will become the New "TCW" (to the extent that TCW was THE top-notch mortgage shop).

A high $$$ game of musical chairs.

by Assetman
on Fri, 12/11/2009 - 12:43
#160166

Oh... and I would guess that a handful of PMs will be getting paid (before bonus) a little better.

That's what muscial chairs in this business tends to do...

by Fibozachi
on Fri, 12/11/2009 - 00:02
#159819

Great highlight.  Muchas gracias, TD.

by Anonymous
on Sun, 12/13/2009 - 16:52
#162369

I believe TCW sent the old org chart as of Sept pre deal along with the new one as of December post deal .

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