Institutional Capital, the Chicago firm that was once honored by Morningstar for its outstanding international mutual fund, is losing its MainStay ICAP mutual fund business.
The ICAP International Fund’s former manager and ICAP founder, Robert Lyon, won the prestigious Morningstar Manager of the Year award in 2005 but died a couple of years later. After Lyon’s death, the firm was acquired by New York Life, which confirmed Thursday that it plans to turn over the management of ICAP MainStay funds to Epoch Investment Partners.
Epoch and ICAP are both New York Life businesses and manage the investments in various MainStay mutual funds. The MainStay mutual funds are also part of New York Life’s business. Shareholders in the ICAP MainStay funds will be asked during the next few months to approve the change in investment advisers.
“It’s the end of the relationship between ICAP and MainStay,” said Susan Wasserman, analyst for Morningstar.
At the end of December, ICAP was managing $7.5 billion, according to MainStay spokeswoman Allison Scott, including $4.6 billion in the MainStay ICAP Equity Fund, MainStay ICAP Select Equity and MainStay ICAP International fund and MainStay Map fund. In addition to the mutual funds, the Chicago firm has managed investments for institutions such as pension and endowment funds.
Over the last 10 years, ICAP mutual funds “have not performed well and have been losing assets,” Wasserman said. In addition, fund managers Jerrold Senser and Tom Wenzel retired, she said. Senser, along with Lyon, won Morningstar’s Manager of the Year in 2005. Christopher Kirtley, who has been the manager of the international fund, will continue to work with Epoch as investing responsibilities pass from ICAP to Epoch, Wasserman said.
Epoch Investment Partners is based in New York. Over the next several months, a majority of the ICAP employees in Chicago will be terminated, Scott said.
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