T. Rowe Price to establish additional US entity called T. Rowe Price Investment Management - will move some funds over

[Aw0k3n]

In case you missed the memo

Full details here
https://www.troweprice.com/content/dam/ ... l_Fund.pdf

"T. ROWE PRICE TO ESTABLISH ADDITIONAL U.S. ENTITY TO SUSTAIN INVESTMENT PERFORMANCE FOR CLIENTS
Firm Plans to Move Six U.S. Equity and Fixed Income Strategies to Separate Investment Platform, Named T. Rowe Price Investment Management (TRPIM) ,in Second Quarter of 2022. Current Portfolio Managers of the Six Strategies to All Move to New Subsidiary; Build Out of Dual Research Platforms Supported by Deep Team of Experienced Analysts Stephon Jackson, Veteran of Firm’s Equity Division,to Become Head of T. Rowe Price Investment Management"

The firm intends to move:
US Capital Appreciation (PRWCX) - closed
US Mid-Cap Growth Equity (RPMGX) - closed
US Small-Cap Core Equity (TRSSX)
US Small-Cap Value Equity (PRSVX)
US Smaller Companies Equity
US High Yield Bond Strategies

[standard7]

Thanks for posting the pdf, I missed this announcement.

Although I’m confused as to why this is occurring. Lots of marketing verbiage.

They did state one specific benefit below. Is it possible that continuing as one entity would limit their ability to own more shares of “certain holdings”?

“Aligning the strategies in this way will give the firm’s U.S. equity strategies increased flexibility to own more of certain holdings and maximize investment capacity for both TRPIM and TRPA, while maintaining the firm’s investment culture at both entities.“

Any other thoughts on the “why” of a decision to duplicate an existing business structure?

Happy post-Thanksgiving everyone.

[Digital Dave]

There is an article on the Morningstar site that gives a clear explanation. It's written by Katie Rushkewicz Reichart.

[standard7]

Thanks Dave. I’ll take a look at the Morningstar article.

[Iorek]

I read the article and I admit I still don’t understand why they are doing it— is it because there are limits on how much a single fund company can invest in a given company?

[UpperNwGuy]

I am confused too. Why are they doing this?

[tj]

Why reference the MS article and not link it?

[pkcrafter]

M* article

https://www.morningstar.com/articles/10 ... dle-growth

Still not enough information.

https://www.wealthadviser.co/2020/11/20 ... erformance

Paul

[standard7]

. I read the article and I admit I still don’t understand why they are doing it— is it because there are limits on how much a single fund company can invest in a given company?

I’m guessing that increasing existing positions might allow for the closed funds to open. Possibly the other funds were destined to close soon too and this may allow them to continue to grow.

Is the reason that funds close is because of limits to purchasing certain assets or because there is a limit the availability of those assets, or both?

[Aw0k3n]

. I read the article and I admit I still don’t understand why they are doing it— is it because there are limits on how much a single fund company can invest in a given company?

I’m guessing that increasing existing positions might allow for the closed funds to open. Possibly the other funds were destined to close soon too and this may allow them to continue to grow.

Is the reason that funds close is because of limits to purchasing certain assets or because there is a limit the availability of those assets, or both?

not sure.
PRNHX new horizons has 34 billion in assets and is closed but TRBCX Blue chip Growth (Manager: Puglia) with 86 Billion USD in assets is open. So not sure what they are using to decide which funds to close.

[standard7]

PRNHX has 169 positions and TRBCX has 120, but it still may be an issue of taking too large of a position in PRNHX mid-cap stocks instead of TRBCX. Although Cap Appreciation is closed and it's holdings are primarily large cap. ?? I really don't know.

Here's a good article also from Morningstar on why funds close - https://www.morningstar.com/articles/94 ... ers-to-you

But... I may have injected a red herring into the discussion by mentioning the possibility of the changes at TRP being related to opening funds and growing their size. I need to re-read the MS and TRP statements, maybe there is a primary underlying motivation, but I don't see it now.

[Aw0k3n]

PRNHX has 169 positions and TRBCX has 120, but it still may be an issue of taking too large of a position in PRNHX mid-cap stocks instead of TRBCX. Although Cap Appreciation is closed and it's holdings are primarily large cap. ?? I really don't know.

Here's a good article also from Morningstar on why funds close - https://www.morningstar.com/articles/94 ... ers-to-you

But... I may have injected a red herring into the discussion by mentioning the possibility of the changes at TRP being related to opening funds and growing their size. I need to re-read the MS and TRP statements, maybe there is a primary underlying motivation, but I don't see it now.

This is really useful. Thank you for sharing

[working7]

Two firms, more capacity, more management fees.

[LadyGeek]

This thread is now in the Investing - Theory, News & General forum (news).

working7, Welcome!