Franklin Advisers has restructured its loan group and divvied up the responsibilities of Richard D'Addario, senior portfolio manager and director of research, who left at the start of the month. One source familiar with the situation said the group has always taken a team approach, so the transition should be smooth. "That team is still in place but [they] all have more responsibility now," he said.
D'Addario's departure was not performance related, one source said, but the exact reason for his departure could not be determined. The source added that D'Addario "has not been replaced and will not be replaced, which is too bad as he has done a great job since he took over from Chauncey Lufkin. He's brought a lot of money into the fund." D'Addario was promoted within Franklin to replace Lufkin who became CIO of Franklin's debt group in 2002. D'Addario has not yet landed elsewhere, but one source said he is close to a new position.
A Franklin spokeswoman confirmed that D'Addario has left, but declined comment on reasons, other than to say he left to pursue other opportunities. Mark Boyadjian, senior v.p. and head of the Floating Rate Debt Group, to whom D'Addario reported, did not return calls by press time. D'Addario could not be reached. The spokeswoman said Richard Hsu is now leading the retail loan funds. Madeline Lam and Matthew Gregory are the other portfolio managers. David Ardini, who was said to be trading loans at Franklin previously, is now leading the CLO group. "[Franklin has] somebody that's been with the group for a long time, knows structured vehicles really well, particularly derivatives," said a portfolio manager.
According to Fitch Ratings, Franklin Templeton CLO--one of Franklin's collateralized loan obligations--is performing strongly. The portfolio manager was successful in 2003 in managing the assets of Franklin (LMW, 1/19/03). Also, the retail funds had a good year with above average returns for the asset class (12/1).