When their time comes and their track record is impressive, a mutual fund manager typically leaves their current firm to start a hedge fund. But contrary to the prevailing trend, David Winters, the former chairman and CEO of Franklin Mutual Series Funds in Short Hills, N.J., decided to start a mutual fund.
In a recent interview with the Daily Record of Parsippany, N.J., Winters said he chose the unconventional route for his Wintergreen fund because, "I love managing money for individuals as well as for institutions. I like to take a long-term perspective. And I wanted to run an active fund, not one of those index-hugging funds."
Mutual funds, however, are not just another small time business endeavor. They tend to be very expensive and hard to put together, which is why new mutual funds are usually reserved for deep-pocketed giants like Vanguard Group and Fidelity Investments.
"We're trying to have high standards," he said.
Wintergreen takes the Franklin Mutual Discovery Fund as it's role model, but Winters said, "It will be even more global," and it's an all-cap fund.
"That seems to make sense. We'll end up with all kinds of good securities."
The fund is projected to go after stocks and distressed securities, and in general, "wherever the best opportunities are," he said.
As for the critics who claim a new fund is too expensive, Winters retorts: "The cost is necessary and appropriate for our work."