Barrows Moves To New HY Fund Post


Veteran high yield fund manager Curtiss Barrows has jumped ship for the second time in two years - abandoning Deutsche Asset Management for Villanova Capital. He will, however, be taking a familiar investment route: focusing on credit analysis and managing for total returns.

"Nothing changes in terms of style," Barrows said.

Barrows joined Villanova Capital, the asset management arm of Nationwide Financial, last week as a senior portfolio manager. He will manage institutional separate account and co-mingled high yield investments, including the newly-formed Nationwide High Yield Bond Fund.

He will also assume management of all of Villanova's domestic and international high yield interests and work to build a high yield team.

"I just think there's huge potential in high yield, especially with pre-stock type of investments," he said. "We think you can get really good values in this market relative to the stocks. There's a lot of the same potential, but there's greater risk in stock than with bonds over time."

Most important to Barrows' investment strategy is strong credit analysis, highlighting sectors he believes macroeconomic conditions will favor and then choosing among the strongest names in that sector.

That analysis will cross over into international high yield names, especially in Europe, and may also include emerging markets names. Barrows also might venture into distressed names, but would not go so far as to call himself a vulture investor.

"Our philosophy is to take each deal one at a time," he said. "We're looking for some liquidity, but if it's a smaller issue of $100 million or $200 million, if it's a good company, we're interested. If you believe in the company, you're willing to take on that short-term volatility if you think the long-term will give you greater value."

The Nationwide Fund will weight heavily in telecom, cable and media - looking for names with solid management teams, strategic partners, viable business plans and strong credit.

Although Barrows stayed far from the healthcare sector during its recent downward spin, he said it was too early to comment about any future investments in that sector. He did, however, say he would continue to avoid restaurants and the financial services sector.

The Nationwide High Yield Bond Fund is currently available to institutional investors and will be available through retail outlets later in the quarter.

Before joining Villanova, Barrows served as a director and portfolio manager at Deutsche Asset Management. There he was responsible for approximately $550 million in institutional separate and co-mingled accounts, including the Morgan Grenfell High Yield Bond Fund. Prior to joining Deutsche in 1998, Barrows spent 13 years as a high yield fund manager with Phoenix Duff & Phelps, where he managed the Phoenix High Yield Fund (now the Phoenix-Goodwin High Yield Fund)