Franklin Templeton Investments (NYSE: BEN) is delighted to celebrate the 60th anniversary of its Mutual Series group. Founded in 1949, Mutual Series has a long history as deep value investors with a very distinct style, searching aggressively for investment opportunities in undervalued stocks, merger arbitrage situations, corporate reorganizations and distressed securities.
“At Mutual Series, we are opportunistic value investors, who think and act like company owners,” said Peter Langerman, President and CEO of Mutual Series. “We focus on recognizing value that most other investors miss. We seek to buy intrinsic value at a discount, often with a catalyst in place that we think will unlock that value. Sometimes we see changes that can be made to increase shareholder value, and we will get involved in making those changes happen. It goes back to our bottom-up, fundamental approach—we try to understand the risk and downside in each specific investment. We don’t know when markets will move, but we are always careful about owning companies that fit our criteria and that can sustain themselves through even a challenging economic environment so that we can seek to deliver solid, risk-adjusted returns in the long-term,” said Langerman of the team’s disciplined investment philosophy.
A Rich History
Mutual Shares Corporation was established in 1949 by several men, including Max Heine, who used to say his strategy was “to buy a dollar for 50 cents.” Heine Securities Corporation, former investment advisor of the Mutual Series funds, was incorporated in 1975. That year, Michael Price joined the firm and learned its distinct approach to value investing.
By the mid-1980s, Price became well-known for his aggressive shareholder activism, finding value in troubled companies and pressing management, often very publicly, to unlock that value for shareholders. Price became president, chief operating officer, chairman and sole owner of Heine Securities in 1988 and moved the firm’s operations from New York City to Short Hills, New Jersey, where Mutual Series’ offices remain today. In 1996, Franklin Resources acquired the firm, and the Mutual Series funds became part of the Franklin Templeton Investments fund family. Price stayed on as chairman until leaving the firm in 2001.
Langerman originally joined Heine Securities Corporation in 1986 and worked closely with Price. He served as CEO of Mutual Series beginning in 1998 before leaving in 2002 to serve as director of New Jersey’s Division of Investment, overseeing employee pension funds. Langerman rejoined Mutual Series in 2005 in his current role as president and CEO.
Mutual Series Today
Mutual Series’ time-tested approach of applying dedicated fundamental research to identify businesses whose true value has been missed and engaging in shareholder activism to unlock that value, while keeping an eye on below average risk, continues today. At present, the Mutual Series investment team comprises more than 25 portfolio managers, analysts and traders with an average of over 16 years of industry experience, including a dedicated distressed securities team.
Today, Mutual Series’ unique strategies are available to investors through four Luxembourg-domiciled SICAVS, namely FTIF Franklin Mutual Beacon Fund, FTIF Franklin Mutual European Fund, FTIF Franklin Mutual Global Discovery Fund and the newly-launched FTIF Franklin Mutual Euroland Fund. The funds are suitable for long-term investors looking for capital appreciation with lower volatility and downside risk over the full market cycle.
Looking toward the future, Langerman said, “The silver lining in all of the recent market volatility is that stocks are at levels where we are finding some attractive opportunities, both in the U.S. and internationally. To put it simply, we’re just going to keep doing what we’ve always done—roll up our sleeves to do our own proprietary research and concentrate on uncovering compelling value opportunities wherever they may hide.”
Franklin Resources, Inc. [NYSE:BEN], is a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management solutions managed by its Franklin, Templeton, Mutual Series, Fiduciary Trust, Darby and Bissett investment teams. The San Mateo, CA-based company has more than 60 years of investment experience and over $448 billion in assets under management as of May 31, 2009.
