Barrow, Hanley, Mewhinney & Strauss is a Dallas based company established in 1979 by its founder James Barrow. It currently holds 161 stocks worth $49,518 million. It caters to investment companies, individuals and other pooled investment vehicles, charitable organizations, state or municipal government entities and operating funds. They primarily have grouped these broad categories under institutional management of funds and mutual funds.
This company is managed by five managers. However, Mr. James Barrow still remains the head of the company and the real portfolio manager. He attained his BS from University of South California before venturing into the world of financial institutions. The other managers are Mr. Robert James Chambers (Managing Director and Portfolio Manager), Mr. Joseph Ray Nixon (Executive Director), Mr. John P Harlow (Managing Director and Portfolio Manager) and Mr. Richard Albert Englander (Principal and Large Cap Equity Portfolio Manager).
Barrow’s former parent company, United Asset Management was acquired by Old Mutual Plc. Hence, it became an affiliate of Old Mutual Asset Management, a subsidiary of Old Mutual Plc. It is an international financial services group based in London. In January 2010, BHMS took another stride and from a Nevada corporation, it became a Delaware Limited Liability company. This status allowed BHMS employees to maintain significant economic ownership. Being an Old Mutual Asset Management subsidiary, it means it falls under 20 independent asset management firms that make up the composition of Old Mutual which is a US Based member of multi- national, multi-style Old Mutual Asset Managers group of companies. It puts on offer a wide array of strategies and styles. These strategies can be seen reflected in the vast options that BHMS provides its clients and the strategies it employs to keep up the traditional value system up to date and effective.
It must not be confused that being a subsidiary, BHMS is not autonomous. In fact it is an independently owned company operation from its Dallas headquarters absolutely autonomously.
Investment Philosophy:
Their portfolios always exhibit exhibit below-market price-to-earnings ratios, below-market price-to-book ratios, and above-market dividend yields, regardless of market conditions. With this safe and secure traditional approach, clients often feel confident in their investments and decide to rely on Barrows expertise whereas in fixed income, value is defined as temporarily mispriced securities with yield to maturity advantages over Treasury bonds of comparable maturity. Each opportunity is identified from bottoms up analysis, building a duration-neutral portfolio that “out yields” the market. Hence, it is able to achieve higher total returns for fixed income clients with low volatility.
It offers to its clients an array of options from which they can make use of the one best suitable to their needs. They range from U.S. equity, international equity, fixed income, and balanced investment management.
Their strategies are varied and are exclusive to the type of fund. For US equity they offer Large Cap Value Equity, Diversified Large Cap Value Equity, Mid Cap Value Equity, Small Cap Value Equity and Diversified Small Cap Value Equity. International equities use international value equity while for US Fixed Income category there are a lot of options. It includes Core Fixed Income, Core Plus Fixed Income, Intermediate Fixed Income, Short Maturity Fixed Income, Investment Grade Credit Fixed Income, Long Credit Fixed Income, Long Government/ Credit Fixed Income, Extended Duration Credit fixed Income, High Yield Credit Fixed Income and TIPS. Lastly, they have the balanced investment management available using any combination of equity and fixed income styles. They offer large cap, mid cap, and small cap value equity and core, core plus, intermediate, and short maturity fixed income. They have a wide scope of investment styles ranging in line with the various funds they offer.
Managers’ Bio:
The reliance and goodwill of Barrow, Hanley, Mewhinney & Strauss can be gauged by the fact that it has been working efficiently for the past 30 years. It has clients representing worth $55 billion laying its trust in them to manage their money.
Barrows main forte lieds in managing U.S. tax-exempt portfolios for institutional clients. By October 1979 they had expanded enough to venture into managing large cap value equity. By 1983, they had established value oriented fixed income strategy. Further by July 1995, they had added small cap value equity to their portfolio alongside mid cap value strategy in March 1999. Their current portfolio includes core, core plus, intermediate, defensive, long duration, and high yield products, as well as special purpose portfolios. By the year 2000, diversified large cap value strategy was also added to this vast list. In 2006, two new equity strategies were added, international and diversified small cap value alongside balanced management that is primarily a combination of equity and fixed income strategies.
The main manager in charge of Barrow, Hanley, Mewhinney and Strauss is Mr. James Barrow. He is currently the President, Secretary, Treasurer, Executive Director, Portfolio Manager and Member Board of Managers. In addition to his vast portfolio within the company he is the founder of the company and is an industry veteran with 48 years of experience behind him. He is also the lead Portfolio Manager at Vanguard Windsor II, Vanguard Selected Value Funds, Principal funds Inc –MidCap Value Fund III, VALIC Company I- Board Cap Value Income Fund and Large Cap and Mid Cap Value Equity. It may be concluded from his credentials that Mr. Barrow indeed is quite a dynamic personality and his opinion is highly sought. Their 30 year experience is evidential of Barrow’s market understanding. Their main stay is to rely on exploiting the inefficiencies in market and to provide low risk investments. They are also recognized for their well acquaintance with the old mutual family fund. The essence of this type of fund is to provide a long term capital growth in this area.
Barrows graduated from University of South Carolina and immediately stepped in to the world of financial institutions. He worked as a Securities Analyst and Portfolio Manager at several major institutions including Citizens & Southern Bank of South Carolina, Atlantic Richfield and Reliance Insurance. He worked at Republic National Bank of Dallas as a Portfolio Manager from 1973 to 1979, when he finally took the leap forward and started his company. In addition to the current positions he holds within his own company and Vanguard, he is a Portfolio Manager of American Beacon Mid-Cap Value Fund, American Beacon Balanced Fund, Old Mutual Barrow Hanley Value Fund and Vanguard Variable Insurance Fund – Diversified Value Portfolio; and Securities Analyst and Portfolio Manager at Reliance Insurance Company and Atlantic Richfield Co.
The second most important key figure in the company is Mr. Robert James Chamber. He is the Managing Director and Portfolio Manager. He holds a BS in Finance from Drexel University and is well reputed within the industry. To add to his qualification he is a CFA holder. He joined the firm in August 1994 and since then has been a pool of contribution towards the triumph of the company. Mr. Chambers is also a Portfolio Manager at Vantagepoint Funds – Equity Income Fund and VALIC Company I – Broad Cap Value Income Fund. During his career, Mr. Chambers worked as a Senior Securities Analyst and Portfolio Manager at General Accident Group. He has a vast experience of 38 years to back him up in his endeavors.
Mr. Joseph Ray Nixon Jr is an Executive Director at BHMS since 1994 when he joined the firm. He also holds the position of a Portfolio Manager and Member Board of Managers. His prior experience includes working at Salomon Smith Barney Inc. where he was a Member of the firm’s investment policy committee and their lead Institutional Stockbroker for the Southwest. He previously held the position of a Research Analyst at the Teacher Retirement System of Texas. Mr. Nixon is a Director at Pacific Financial Research Inc. He is also a Director at the Presbyterian Healthcare Foundation and the Committee Chairman at Young Life for the Dallas area. Mr. Nixon also serves on the Board of the Salvation Army and the Strategic Advisory Board of the C.F.A Society of Dallas, Fort Worth.
He acquired his BA degree from university of Texas. He later went on to do his MBA from the same University before he was fully geared up for the industry. His total experience expands across a good 33 years.
The fourth Manager at BHMS is Mr. John P Harloe. He currently holds the position of a Managing Director and Portfolio Manager. He holds a BA degree from University of South Carolina from where he later acquired his MBA as well. He is also a qualified CFA. In addition to Barrows he also holds the position of a portfolio manager at MassMutual Select Funds- Small Cap Value Equity fund, American Beacon funds- Small Cap Value Fund and RiverSource Partners Small Cao Value Fund. He joined Barrows in 1995. Prior to that, he held the position of a Vice President, Equity Portfolio Manager and Analyst for nine years at Sterling Capital Management. In addition to this he has also worked at American National Insurance Company, American Capital Management and Research and Oppenheimer & Co. Inc. His total investment career spans 34 years and is dotted with diversity.
The last man on the top management crew of Barrows, Hanley, Mewhinny, Strauss is Mr. Richard Albert Englander. He holds the position of a Principal and Large Cap Value Equity Portfolio Manager. He joined the company in April 1985.his total investment career spans a hefty 43 years. He was previously a Vice President and Portfolio Manager at Philadelphia Life Asset Management Company from October 1971 to October 1981. He was also a Senior Vice President and Manager of Equity Group at INA Capital Management Corporation from October 1981 to September 1982. From 1982 to 1985 he was the Vice President and Portfolio Manager at General Accident Group.
Mr. Englander holds an MBA from the prestigious Wharton Business School, University of Pennsylvania in enhancement to his BS degree from State University of Pennsylvania. He is also a qualified CFA.
Together these five managers bring their vast experiences and the acumen accumulated over the years. They are primarily known in their industry for sticking to the traditional values and methods of dealing with funds. They deal in a vast variety and primarily believe in exhibiting below-market price-to-earnings ratios, below-market price-to-book ratios, and above-market dividend yields, regardless of market conditions.
Quotes:
“The whole board has to change. We don’t see any way not to do it,” (Daily News)
“Mulva built this company in a different commodity price environment and different outlook and now we have an opportunity to separate back and really get peer group multiples that are much higher than the integrated multiples investors are assigning to the company.” (Reuters)
News:
Lewis, Barrow Hanley Lose Combined $2 Billion on Bear (Update2).Bloomberg, 17th March 2008
Large Hancock investor bridles at price of Manulife deal. BizJournal, 30th September 2003
NEW VANGUARD CHIEF PROMISES INNOVATION, Sun Sentinel, 5th June 1995
INVESTING WITH: James P. Barrow; Vanguard Windsor II Fund. New York Times, 3rd May 1998
Two more shareholders back Sallie on offer: report. Reuters, 5th October 2007
Amid Bear Stearns Rubble, Lawyers Swoop In. The Sun, 18th March 2008
Lewis bullish on Bear Stearns stake. The Investment News, 7th December 2007
Shale Game. Bloomberg, 17th June 2010
Berkshire Split May Boost Stake of ‘Inferior’ Owners (Update2). Bloomberg, 3rd November 2009
Mutual Funds; What’s Happening With Windsor? New York Times, 6th October 1991
Tyco board may call it quits Resignation talk gives stock big lift. Daily News, 22nd August 2002
$2.32 billion in retirement assets from Stanley-B&D merger. Pension & Investment, 3rd November 2009
AGF SHUFFLES HARMONY MANAGERS. Adviser.ca, 6th july 2011
