This Financial Post profile of Jeff Everett, formerly with Templeton and now running his own outfit called EverKey Global Partners, is good stuff.
Mutual funds are often victims of their own success. Investment returns can attract more and more money from investors, which can lead to creating more and more funds. And even larger numbers of fund managers and staff to handle everything. Giant fund companies have a hard time putting money to work as well as when they were smaller. But that's not the only problem with bloated operations.
From the linked story:
Everett is frank about why he left Templeton. "There was a tremendous team at Templeton to uncover opportunities. But in the last few years even with the capital I had to tackle new initiatives, there was tremendous inertia to look at new ways to manage risk. I said we can take the Templeton process and improve on it."
And this interesting bit about Sir John:
He has fond memories of working side by side in Nassau with the late Sir John Templeton [pictured below]. In an interview, Everett said the Templeton funds never went short under Sir John or after but that he did put some of his personal money derived from selling his firm into hedge funds run by George Soros and Julian Robertson. However, "I'd argue if he were managing the company in the 1990s especially with the Internet bubble, we'd have found a way to be short in the fund. It's inaccurate to say Templeton never believed in shorting."
About what he's doing now:
One of Everett's long picks currently is China's Inspur International Ltd., trading in Hong Kong, which is 25% owned by Microsoft. It's covered by only one western brokerage firm but Everett came across it through a good contact he met in China.
On the short side, he can't mention current names but cites a past one: Cemex and some China-based shipping stocks. Because the fund has a long bias, it will never be net short. It may be half long and half short or half long and half in cash, or even 100% in cash. In this respect, Everett reverts to the Templeton philosophy: "We're long term investors. There's always something in the world you want to own but there may be a lot of stocks you want to short as well. We're not necessarily the fund to buy in a crash but in a bear market we will do well."
Currently, the fund is fully invested in 90 companies: none of them Canadian. Geographically, it's evenly split around the world: 40% Asia, 35% America and 35% Europe.
Everett has always struck me as a good guy. Read the entire piece when you get time.
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