IVA Funds, a 12-year-old value shop managing nearly $2.5 billion in two mutual funds, filed on Wednesday with the Securities and Exchange Commission to start a liquidation process “with the intention of deregistering as an investment adviser and terminating its existence.”
The New York-based boutique asset manager did not immediately respond to a request for comment, but according to the filing, the liquidations are expected to take place “on or about April 19, 2021.”
Both the IVA Worldwide Fund (IVWIX) and the IVA International Fund (IVICX) were launched in October 2008 and have had relative success attracting assets over a period that has been challenging for value strategies.
Recent performance challenges at a time when growth stocks continue to charge on have likely contributed to asset outflows from the funds, according to Todd Rosenbluth, director of mutual fund and ETF research at CFRA.
“It is extremely rare for mutual funds with a significant asset base to liquidate rather than seek to sell the funds to another asset manager especially since the value investment style has shown signs of returning to favor in 2021,” he said. “Asset manager consolidation has been increasing as firms seek to round out their offerings and benefit from scale.”
The IVA Worldwide Fund, which has a two-star rating from Morningstar in the world large stock category, has seen assets drop to $1.9 billion from $2.1 billion at the start of the year, when the fund had a 36% allocation to cash.
The fund’s 5.7% return this year through Wednesday ranks it in the 23rd percentile of the category, but the 70-basis point decline in 2020 and 12.7% gain in 2019 ranked it in the 90th and 82nd percentiles, respectively.
The fund’s 12-month trailing return through February was 10.6%, which compares to 30.3% for the benchmark MSCI All Country World Index.
The IVA International Fund, which has a two-star rating in Morningstar’s foreign large-blend category, has seen assets drop to $534 million from $862 million at the start of the year, when it reported a 37.5% cash position.
The fund’s 3% gain this year ranks it in the 66th percentile. The 4.9% decline in 2020 and 13.4% gain in 2019 each ranked the fund in the 99th percentiles.
The fund’s 12-month trailing return through February of 6.5% compares to a 26.2% gain for the MSCI All Country World Index.
Value strategies in general clearly have faced a challenge, but IVA appears to have had some extra challenges, including the sudden departure of co-chief investment officer Charles de Lardemelle last July, at a time when the Worldwide Fund had $3.3 billion and the International Fund had $1.5 billion.
Meanwhile, $34 billion independent First Manhattan welcomed New Jersey-based Roanoke Asset Management, an RIA firm with more than 40 years of history.
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