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Money Flows Out of Brandes's Investment Firm, As Stock Portfolio Fails To Perform

In the second half of last year, the San Diego money management firm of Brandes Investment Partners had $125 billion under management. According to the firm's website, that total was down to $86.4 billion at midyear 2008. The institutional/private client fund had $65.1 billion at midyear, down from a peak of $102 billion in 2005. Some 37 percent of that $65.1 billion is in international equities. For the year to date, that fund has dropped 13.42 percent, worse than the MSCI benchmark of minus 10.96 percent. Brandes's global equity fund, which is 22 percent of the institutional/private portfolio, is down 18.74 percent so far this year, comparing unfavorably with MSCI's drop of 10.57 percent. The domestic performance has been dismal. Brandes's value equity fund is down 24.78 percent through midyear compared with a drop of 11.91 percent for the Standard & Poor's 500. Brandes's small cap value equity fund is down 17.84 percent, more than double the minus 8.75 percent of the S&P small cap index. Brandes's mid-cap value fund is down 24.32 percent, compared to a drop of 6.53 percent for the S&P mid-cap fund. As I have reported earlier, Brandes has 7.57 percent of the stock of McClatchy newspapers. He once had twice that. He began buying at $44.50 and the stock closed today (July 28) at $4.25. Brandes owns 11.27 percent of the Gannett newspaper chain. He began buying at $53-$58 a share and today it closed at $17.20. Brandes bought Countrywide Financial at $19.74 and July 1 it merged into Bank of America at $4.85. Brandes began buying Washington Mutual at $27.84 and owns 4.98 percent of the stock. It closed today at $3.95. He had 10 percent of Alcatel Lucent when it was trading above $12 last year. Today it closed at $5.76. He has 4.56 percent of that stock. Brandes, who follows the Graham-Dodd value approach (a sound philosophy), did a great job building his firm and his wealth, but he has fallen into a bad streak. Brandes and his beautiful new wife Tanya, frequently photographed on the society pages, have built a 54,000 square foot house in Rancho Santa Fe, which Forbes magazine valued at $60 million. Brandes says it is worth less. He may be right; the stocks he purchased are sure worth less than what he paid.

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In the second half of last year, the San Diego money management firm of Brandes Investment Partners had $125 billion under management. According to the firm's website, that total was down to $86.4 billion at midyear 2008. The institutional/private client fund had $65.1 billion at midyear, down from a peak of $102 billion in 2005. Some 37 percent of that $65.1 billion is in international equities. For the year to date, that fund has dropped 13.42 percent, worse than the MSCI benchmark of minus 10.96 percent. Brandes's global equity fund, which is 22 percent of the institutional/private portfolio, is down 18.74 percent so far this year, comparing unfavorably with MSCI's drop of 10.57 percent. The domestic performance has been dismal. Brandes's value equity fund is down 24.78 percent through midyear compared with a drop of 11.91 percent for the Standard & Poor's 500. Brandes's small cap value equity fund is down 17.84 percent, more than double the minus 8.75 percent of the S&P small cap index. Brandes's mid-cap value fund is down 24.32 percent, compared to a drop of 6.53 percent for the S&P mid-cap fund. As I have reported earlier, Brandes has 7.57 percent of the stock of McClatchy newspapers. He once had twice that. He began buying at $44.50 and the stock closed today (July 28) at $4.25. Brandes owns 11.27 percent of the Gannett newspaper chain. He began buying at $53-$58 a share and today it closed at $17.20. Brandes bought Countrywide Financial at $19.74 and July 1 it merged into Bank of America at $4.85. Brandes began buying Washington Mutual at $27.84 and owns 4.98 percent of the stock. It closed today at $3.95. He had 10 percent of Alcatel Lucent when it was trading above $12 last year. Today it closed at $5.76. He has 4.56 percent of that stock. Brandes, who follows the Graham-Dodd value approach (a sound philosophy), did a great job building his firm and his wealth, but he has fallen into a bad streak. Brandes and his beautiful new wife Tanya, frequently photographed on the society pages, have built a 54,000 square foot house in Rancho Santa Fe, which Forbes magazine valued at $60 million. Brandes says it is worth less. He may be right; the stocks he purchased are sure worth less than what he paid.

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