RS Investments last week announced an agreement to acquire certain assets of Oak Value Capital Management Inc., which is the adviser to the Oak Value Fund, which has $81 million in assets.
Terms were not disclosed.
When the deal closes sometime this fall, the Oak Value Fund (OAKVX) will be folded into a new fund, the RS Capital Appreciation Fund, said Terry Otton, chief executive at RS Investments. Registration with the Securities and Exchange Commission is pending.
Oak Value Capital Management Inc. then will cease operations.
The co-portfolio managers of the Oak Value Fund, David Carr, Larry Coats and Christy Philips, will join San Francisco-based RS Investments as partners. The trio will remain at their base in Chapel Hill, N.C.
“One thing that was extremely ... attractive to us is [RS'] focus on having specific investment teams” manage funds, Mr. Coats said. “Their ability to allow us to operate independently and manage this fund was very important to us.”
Despite the new fund name, Oak Value “shareholders should expect more of the same,” he added. “We're just doing more of what we do well, and [the sale will] relieve us of running the business on a day-to-day basis.”
“We don't think there will be any material impact” from the name change, Mr. Otton said. “The identity [of the fund] will be associated with those three individuals.”
Oak Value Capital Management has $195 million in total assets under management, a fraction of the $15.4 billion run by RS, which includes $10 billion in its family of funds.
Executives at the firms expect that the Oak Value money managers will benefit from RS' wider distribution capabilities.
In a recent research report, Morningstar Inc. analyst Gregg Wolper lauded the Oak Value Fund for the long tenure of its managers and the fund's detailed shareholder reports.
“For several years in the mid-2000s, the fund had trouble keeping up with its competitors,” Mr. Wolper wrote. “But it adjusted its analytical approach a bit, and since then, it has performed more impressively.”
E-mail Dan Jamieson at [email protected].
