Wellington Management Company

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Wellington Management Company LLP
ImgWellington Logo.jpg

Start date: 1928
Founder: Walter Morgan
Location: 75 State Street, Boston
State: Massachussets
Key people: Perry Traquina, CEO
AUM: US $598 billion

Wellington Management Company LLP is a large private investment management company, founded in 1928, and located in Boston (75 State Street, Boston, Massachusetts 02109, 617 951-5000, wellington.com).

According to Wellington, as of 2010 the firm has "approximately US$598 billion in client assets under management" and "serves as an investment advisor to more than 1,850 institutions located in over 50 countries." Nearly 30% of that total is represented by mutual funds that it manages for Vanguard, one of its largest clients and one with whom it has a longstanding historical connection.

John C. Bogle's connection with Wellington

John C. Bogle began working for Wellington Management immediately on graduation from Princeton, eventually becoming chairman. In his book Character Counts, he describes how, in 1966 he consummated a merger of Wellington with Thorndike, Doran, Paine and Lewis, "an aggressive equity manager." He says "I relinquished too much of the voting control of Wellington Management Company for my own good." A profile of Bogle on the American Business Hall of Fame website also alludes to and describes "difficulties dealing with the new Boston partners" leading eventually to "open hostility."

This led to Bogle's firing in the midst of a bear market on January 24, 1974. In his words, "my four partners banded together to fire me as chief executive of Wellington Management Company." [1] He founded Vanguard immediately thereafter, creating a "mutualized" governance structure he had originally proposed for Wellington.

Vanguard funds managed by Wellington

As of Nov. 2010, Wellington manages 19 funds for Vanguard--fifteen mutual funds and four Vanguard Variable Annuity subaccounts

Mutual funds

  • Vanguard Capital Value Fund (VCVLX)
  • Vanguard Dividend Growth Fund (VDIGX)
  • Vanguard Energy Fund (VGENX)
  • Vanguard Equity Income Fund (VEIPX)
  • Vanguard Explorer Fund (VEXPX)
  • Vanguard GNMA Fund (VFIIX)
  • Vanguard Health Care Fund (VGHCX)
  • Vanguard High-Yield Corporate Fund (VWEHX)
  • Vanguard International Explorer Fund (VINEX)
  • Vanguard Long-Term Investment-Grade Fund (VWESX)
  • Vanguard Morgan Growth Fund (VMRGX)
  • Vanguard U.S. Growth Fund (VWUSX)
  • Vanguard Wellesley Income Fund (VWINX)
  • Vanguard Wellington Fund (VWELX)
  • Vanguard Windsor Fund (VWNDX

Wellington also manages four subaccounts in the Vanguard Variable Annuity--listed here as named by a Vanguard spokesperson:

  • Vanguard Variable Insurance Fund - Balanced Portfolio (annuity version of Wellington Fund)
  • Vanguard Variable Insurance Fund - Equity Income Portfolio (annuity version of Equity Income Fund)
  • Vanguard Variable Insurance Fund - Growth Portfolio (annuity version of U.S. Growth Fund)
  • Vanguard Variable Insurance Fund - High Yield Bond Portfolio (annuity version of High Yield Bond Portfolio)

Nov. 23, 2010 document request by Federal investigators

According to a November 23, 2010 Bloomberg article, Wellington is one of several firms that have received document requests in connection with federal investigations of possible insider trading by hedge funds. The article says "No allegation of wrongdoing has been made against... SAC, which manages $12 billion, or Janus and Wellington" and that "Wellington said on an internal conference call yesterday that it’s conducting a review of records, and that it didn’t engage in illegal trading,"

The article cited Vanguard spokesperson Linda Wolohan as saying that Wellington serves as an adviser to 19 Vanguard funds with about $175 billion in assets, and that “Vanguard has a longstanding relationship with Wellington and remains fully confident in and committed to that relationship and the investment-advisory services provided by the firm on behalf of our client."

On Nov. 29th, in an email in response to a query from Nisiprius, Wolohan stated:[2]

Wellington, along with a number of other investment management firms, has received a request for information from government officials with respect to trading activity. To be clear, this reported request for information and documents should not be construed as implying wrongdoing by Wellington. For example, such requests can sometimes be rather broad and sweeping in their nature, directed to industry participants as a way to gather information regarding industry practices and behavior. Whatever turns out to be the case in this instance, you should know that any request for information that may be directed to Wellington would have no direct impact on shareholder assets or the value of Vanguard mutual funds managed by Wellington. The performance of the funds is driven largely by the financial markets and the specific holdings of particular funds.
Vanguard maintains a comprehensive and rigorous oversight process of our external advisors, which are subject to several levels of controls and regulation to protect the interests of Vanguard fund shareholders. As such, Vanguard remains fully confident in Wellington and the investment advisory services provided by the firm to our clients. We will continue to monitor the situation and report to shareholders on any future developments.

References

  1. Character Counts : The Creation and Building of the Vanguard Group
  2. The complete unedited email can be found in the discussion tab

External links