The Chairman over at Maoxian says the interview is the best thing in Barron's. I'll agree that it is frequently the best thing -- and this week's Q&A with David Winters is a good read.
Winters runs the Wintergreen Fund and first made his name working for the Mutual Series fund family, starting out when Michael Price was there. Wintergreen manages more than $1.6 billion today (and counts Jim Grant of Grant's Interest Rate Observer among the fund's account holders).
Winters takes a global approach, and will at times be an activist investor. The picks mentioned in the interview are all interesting, though I don't have a rooting interest in any of them.
Barron's reports Winters as running a "concentrated portfolio" of 50 stocks (with half of the assets in the top 10 holdings). What qualifies as a concentrated portfolio is in the eye of the beholder -- some consider concentrated as being 20 stocks. Others 10.
Barron's asked Winters why he started a mutual fund upon leaving Mutual Series, instead of a hedge fund where he could charge at least a 1% management fee plus 20% of the profits:
I didn't feel comfortable with the incentive structure of a hedge fund because it seemed to incentivize you too much in the short run. Also, a lot of the money was very short-term in nature. And if there was a lesson from Max Heine, it was to think long term and don't go where the crowd goes. The mutual-fund industry had gone through the scandals of 2003 and '04 and had largely, in my opinion, become an index-hugging enterprise really dominated by marketing as opposed to investing as its primary motive. So I had this epiphany, and I called my friend Liz Cohernour to tell her that we could put together a global value, no-load mutual fund with maximum investment flexibility.
If I ran a private investment partnership, I'd go with something like the approach Walter Schloss employed: charge no management fee and take 25% of the profits. I also believe Schloss would make up any down year before collecting his percentage of the profits later.
Any Sovereign Investment Funds or Middle East oil princes with too much money on their hands can email me and we'll set something up. ;-)
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