In October, First Eagle Investment Management started taking over the Old Mutual High Yield Fund by stepping in as sub-advisor and hiring the fund's co-PMs, Edward Meigs and Sean Slein, away from Old Mutual subsidiary Dwight Asset Management [see MFWire.com, 10/18/2011]. Then last month First Eagle transformed and re-branded the fund as one of its own.
John Arnhold, chairman and chief investment officer, noted that the High Yield Fund is also First Eagle's first new fund in a decade. He pointed out similarities between Meigs' and Slein's approach, on the one hand, and First Eagle's value investing approach, on the other.
"Their temperament as investors mirrors First Eagle's, making them a natural fit for our organization," Arnhold stated. "It was unusual to find such a like-minded team, and we are thrilled to have them on board."
The fund offers three classes: A shares, FEHAX, for a 450-basis-point up-front load and 126 bps in annual expenses; C shares, FEHCX, for a 100-bps deferred load and a 201-bps expense ratio; and I shares, FEHIX, for 81 bps in expenses. The A and C shares both require a minimum investment of $2,500. The I shares, which earned the five-star rating from Morningstar, require a $1 million minimum investment.
First Eagle's funds boasted $48.2 billion in total assets as of December 31.
Company Press Release
FIRST EAGLE HIGH YIELD FUND LAUNCHED
First Fixed Income Fund in the Family Is First New Fund in 10 Years
New York, NY (February 1, 2012) – First Eagle High Yield Fund (Class A share: FEHAX; Class C share: FEHCX; Class I share: FEHIX), the firm’s first fixed income fund, has been launched.
The fund’s objective seeks to provide individual and institutional investors with a high level of current income. Co-managers Edward Meigs and Sean Slein employ a fundamental bottom-up research approach to identify investment opportunities in all stages of the credit cycle.
“We are excited about our High Yield Fund, which is not only the first fixed income fund in our family but the first new fund we’ve launched in 10 years,” said John P. Arnhold, Chairman and CIO of First Eagle Investment Management (FEIM), investment adviser to the fund. “There are significant similarities between the way the High Yield team manages the fund and our value approach to managing equity portfolios, including the team’s focus on absolute returns and bottom-up fundamental research. Their temperament as investors mirrors First Eagle’s, making them a natural fit for our organization. It was unusual to find such a like-minded team, and we are thrilled to have them on board.”
Robert Bruno, president of FEF Distributors, LLC, noted that, “We are pleased to offer investors a vehicle that could meet their need for current income, coupled with First Eagle’s focus on absolute returns. We believe the First Eagle High Yield Fund will resonate well with financial advisors and their clients.”
In October 2011, FEIM became sub-adviser to the Old Mutual High Yield Fund, managed by Meigs and Slein, who each have 23 years of investment experience and have managed the fund since its inception in 2007.
According to the co-managers, “We believe that rotating risk exposure through each phase of the credit cycle is critical to delivering consistent out-performance. Factoring in where we are in the credit cycle helps us make a determination to add or reduce exposure to higher and lower-quality credit tiers in order to add or reduce risk exposure to the portfolio.”
First Eagle High Yield Fund differentiates itself from many of its peers through its focus on risk rotation versus sector rotation; its flexibility to invest with a focus on preventing the permanent impairment of capital, rather than adhering to the constraints of a benchmark; and the continuity of an experienced core team with solid long-term performance.
Minimum initial investment for Class A and C Shares is $2500; the minimum is $1 million for I Shares. For more information, visit firsteaglefunds.com or call 1-800-334-2143.
The First Eagle family of funds, with $48.2 billion in assets as of December 31, 2011, includes First Eagle Global, Overseas, High Yield, U.S. Value and Gold Funds and First Eagle Fund of America. They provide a complementary range of value-oriented investment options. While each fund has its own distinct investment mandate, all share a focus on discovering well-managed, undervalued or overlooked companies, as well as special situations.
First Eagle Investment Management
First Eagle Investment Management is an independent, closely held asset management firm with approximately $60 billion in assets under management and a heritage dating back to 1803. Over its long history, the firm has helped its clients to preserve capital and earn attractive returns through widely varied economic cycles—a tradition that is central to its mission today. For more information visit HYPERLINK "http://www.feim.com" www.feim.com.
First Eagle Investment Management is the adviser to First Eagle Funds.
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