Ann_Humphreville

San Diego money manager Charles Brandes suffers with sagging newspapers

I believe it’s widely acknowledged that Charles Brandes has, for several years now, ceased having any influence on, or significance for, the U.S. investment industry. The same can be said with respect to Charles in relation to his own firm (if his own court pleadings in his divorce case can be believed). Indeed, one of the major criticisms raised about Charles by leaders in the global consulting and brokerage communities spearheading the mass exodus of Brandes’ clients, is his unwillingness to make necessary changes or adjustments regarding the dozen or so members of his firm’s Investment Committee that is responsible for the firm’s sustained underperformance and often highly questionable investment decisions. I believe that Brandes’ 1, 3, 5, and now 7 year performance numbers are all under their relevant benchmarks. Faced with pressure and demands by consultants, brokers and clients to make changes to the quality and composition of this Investment Committee, Charles & Co has steadfastly refused – resulting apparently in the loss of approximately $60 bn in assets under management over 5 years according to this article. This misplaced loyalty probably costs him about $240 mm in lost fees per year. This is to say nothing of what this faith in the competence of his Investment Committee has cost his clients. No serious businessman ignores the need for accountability and allows such an avoidable collapse to befall himself, his firm and his clients. No serious businessman does this while smilingly vacantly from the society pages. Had Charles shown such loyalty to his second wife Linda, he’d of course be in a better position to keep 100% of the annually dwindling fees afforded him by his investment team. If he’d shown such loyalty to his clients, he may not be facing such steep reversals. One wonders at what level of AUM his third wife Tanya joins his clients in the quest for “greener” pastures. In any event, Charles’ refusal to effectively deal with the problems of his Investment Committee makes him the comic lead in his own personal production of “King Lear” with his Investment Committee playing, of course, both Goneril and Regan and his clients playing the long-suffering Fool. "O nuncle, court holy water in a dry house is better than this rain water out o'door."
— February 27, 2011 2:06 p.m.