Longtime Vanguard portfolio manager Granahan set to step back

Still plans to do corporate analysis, study astronomy

By Jeff Benjamin

Dec 16, 2013 @ 1:38 pm (Updated 3:20 pm) EST

vanguard, wellington, granahan

When John “Jack” Granahan talks about past market bubbles, he begins with the “nifty 50” that saw investors pushing up the value of a tight group of stocks in the early 1970s.

“That's the first market bubble I can remember,” said the co-founder and chairman of Granahan Investment Management, and long-time subadvisor to some of The Vanguard Group Inc. funds.

“It was a difficult period and investors were trying to take solace in a very narrow group of stocks,” he said. “The 50 biggest companies had been anointed as stocks you had to own, and the valuations went to excess levels.”

At 77, Mr. Granahan now counts such market cycles as part of the experience in a career that began in 1962 with an analyst job at Wellington Management Co. He started his own firm, now with $3.5 billion in assets, in 1985.

Mr. Granahan, who will officially retire from portfolio management at the end of the year, said he might complete the circle by doing some company analysis work for some of the “younger and more energetic” portfolio managers.

When he first became a portfolio manager while still at Wellington in the late 1960s, Mr. Granahan was responsible for a few portfolios that evolved into some of the original actively managed Vanguard mutual funds when the company was established in 1975.

“Jack's wisdom, investment acumen, and experience greatly contributed to the success of our shareholders over four decades,” said Vanguard chief executive Bill McNabb. “As one of Vanguard's longest-tenured managers, he leaves behind a great legacy and team, who we are confident will continue to serve our shareholders well.”

Two of the funds Mr. Granahan originally managed at Wellington prior to Vanguard are the Vanguard Explorer Fund (VEXPX) and the Vanguard Morgan Growth Fund (VMRGX). The funds started as Wellington products but eventually became part of the Vanguard fund lineup.

Mr. Granahan never worked for Vanguard but spent more than four decades managing portfolios for the company on a subadvisory basis, first at Wellington and starting in the mid-1980s with his own firm.

In terms of the evolution of the asset management industry during his tenure, Mr. Granahan said the one thing that hasn't changed is the value and skill required to analyze the data.

“With all the technology, there has been a tremendous evolution when it comes to fact finding, but what hasn't changed is how you use the data,” he said.

While Mr. Granahan insists he is not retiring, he is looking forward to spending more time with his favorite hobby, astronomy.

“I just signed up for an astronomy course, which is something I really like,” he said. “We will go all the way back to the big bang, and that's what I call the biggest of beginnings of emerging growth."

  @IN Wire

Jul 23 09:00PM
?What have you done for me lately?? http://t.co/SHO6gtVyld
Jul 23 08:43PM
The retail money fund houses are clearly happy. Fidelity: "a reasonable balance" Vanguard: "rules preserve integrity of money funds"

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