Clipper Fund Trio Departs

The (CFIMX Quote)Clipper fund said Friday that a trio of long-serving managers is setting sail.

In an amendment to its prospectus, the $6.6 billion fund said it is reorganizing after the recent decision of longstanding portfolio managers James H. Gipson, Michael C. Sandler and Bruce G. Veaco to leave at year-end. They were three of the six principals of the fund's investment adviser, Pacific Financial Research.

"It's surprising that they are leaving," says Chris Traulsen, fund analyst at Morningstar. "That's the heart of the fund, so it will radically change Clipper."

Meanwhile Pacific Financial's parent, London's Old Mutual, set plans to fold Pacific Financial into a sister entity, Barrow Hanley Mewhinney & Strauss.

"The fund's Board is working with PFR and its parent company Old Mutual Asset Management to ensure uninterrupted portfolio management for the Fund and is considering the reorganization of PFR and other alternatives for managing the Fund," Clipper said.

Gipson and Sandler had been with Clipper since 1984, and Veaco has served since 1986. This is not the first departure for Clipper this year. At the end of June, Doug Grey, who had been with the firm since 1986, left to form his own hedge fund.

Clipper fund is down 1.51% for 2005, according to fund tracker Morningstar, but has returned 8.4% annually over the past five years. That's 10 percentage points better than the S&P 500. The fund has had a large cash stake over the past year: Currently over a quarter of the large value fund is in cash.