The firm earns an Above Average Parent rating.
Brandes is a small independent asset manager based in San Diego, founded by Charles Brandes in 1974. He retired in 2018 and no longer has any role at the firm. He also exited the partnership, but he is still due payments for his interests in the firm until 2029. The ownership transfer is self-funded by the firm and its existing partners, preserving the firm's independence and its sound investment culture. The planned transition to a new CEO slated for May 2024 is unlikely to shake things up. Firm veteran Oliver Murray—currently global head of client services—will replace Brent Woods, who has led the firm for the past 10 years. Woods will remain at Brandes, becoming president of the firm’s general partner with Murray reporting to him. Woods will also remain a fund manager at the firm. A series of promotions were made in conjunction, including a newly created role of director of research and the addition of three limited partners.
We have no reason to believe the firm’s good culture will be challenged through the CEO transition. Brandes has stuck to its deep-value style over time even as assets under management have declined sharply since 2008 because of subdued performance and hefty outflows. According to senior management, the firm remains profitable, and its investment capabilities have been safeguarded. Brandes benefits from a pool of seasoned fund managers and analysts with very long tenures. It’s not rare that investment personnel spend the bulk of their careers at the firm. Teamwork is clearly emphasized with several investment committees running the strategies, which reduces key-person risk.
Compared with appropriate value indexes, the firm’s fund range has performed well on average in the long run, though the emerging-markets equity strategy and the small fixed-income products have delivered mixed results. Another area of improvement would be to formally link the managers' variable compensation to the funds' performance. Our concerns are alleviated by the firm's co-investment policy, whereby fund managers must invest in the funds alongside investors.
United States