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Top Fund Fund Manager - Steven Romick, FPA Crescent


Steven Romick joined FPA Crescent in 1996 and is the manager of the FPA Crescent Fund. He also manages other accounts with the company, including the Contrarian Value Style, LLC and FPA Multi-Advisor Fund, and the FPA Hawkeye Fund. In addition to being a manger, Romick is also an analyst. He is an analyst for FPA Capital and various other separate investment accounts that like in the small/Mid-Cap Absolute Value Style.

 

Under Steven Romick, FPA Crescent Fund, as of April 2010, had a 12 month average return of 28.33%, the 5 year return averaged 7.29%, and the 10 year return average was 11.58%.

 

The structure of the portfolio has something to do with its success. Romick has allocated the fund as follows: Equities make up the largest part of the portfolio with cash and equivalents coming in second. Coming in third is bonds and notes, while the remainder lies in limited partnerships and preferred stocks. The sectors in which these stocks lie are in corporate bond notes, energy, healthcare, financial services, retail, industrial products, telecommunications, convertible bonds, government bonds, and real estate. These sectors include such companies as Ensco plc, CIT Group, Covidien LTD, AON Corporation, Omincare, PetSmart, Vodafone, American General Finance, and a few others.

 

Romick says that his investment actions are "clinical." He states that there is a difference between feeling emotional in a volatile market and acting emotionally. This is very important since Romick is managing a billion-dollar fund. The strategy that he uses is to find good businesses that have inexpensive values. He doesn't look at the size of a company's office building. It is not about big business versus small business because big businesses may not necessarily be good businesses.

 

Romick also states that employment is a good indicator of market turnarounds. In other words, it serves as a guide of when to invest and obtain the highest returns possible. It is also important to note the individuals that are supposed to work 40 hour days but are getting considerably less. When this changes, a true turnaround is occurring and it's time to start investing at the beginning of this turnaround.

 

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