Dick D'Addario, a senior member of the floating-rate investment team at Franklin Templeton Investments' Franklin Advisers and one of the senior professionals in its collateralized debt obligation team, has left the firm. D'Addario, a well-known figure in the CDO world, left Franklin either at the end of last year or early this year as part of a broader reorganization on the fixed income side. As part of the changes, David Ardini, a portfolio manager at Franklin since 2000, will be in charge of managing the outstanding CDOs for which the firm acts as collateral manager, according to the firm. D'Addario could not be reached at his home in Burlingame, Calif., and it could not be determined if he has joined another buy-sider. Lisa Gallegos, a firm spokeswoman, was unable to provide further details.
D'Addario's departure could have an impact on the CDOs managed by Franklin because he was an integral part of the team, according to Mark Gaw, head of CDO manager evaluations at Standard & Poor's. "He did a lot of work in shaping the direction of the management style," Gaw says of D'Addario, adding his departure, "can affect the deals." But, Gaw says it is too early to determine if there has been any deterioration in collateral. An official at Franklin acknowledges there will be a transition period but says it is well-equipped to handle D'Addario's duties.
At small firms, the departure of a senior member would be cause for concern and could cause investors to strip the firm of its management rights, as they did in the case of Triton Partners after two portfolio managers left the firm (BW, 4/22). But, this is less of a concern at a large investor such as Franklin, according to Gaw. In the interim, though, S&P has pulled the manager report it recently conducted on Franklin off its Internet site and is planning to revisit the company soon to revise its CDO manager report.