MENOMONEE FALLS, Wis. - Strong Capital Management Inc. has decided to exercise its option to acquire Schafer Capital Management Inc.'s share of a joint venture between the two companies.
Strong Schafer Capital Management LLC was formed in 1997 to manage the Strong Schafer Value Fund, which was launched in 1985 by Schafer as the Schafer Value Fund but is now part of the Strong family of mutual funds. An agreement between the two companies gave Strong the option to purchase Schafer's interest in the venture, beginning Jan. 10 of this year.
Strong said it expects the acquisition to close in April, upon approval of the fund's shareholders. The price was not disclosed.
David Schafer, who has managed the $371 million-asset fund since its inception, would resign as manager of that fund, as well another Strong mutual fund and a variable annuity portfolio. However, he would remain chairman of Schafer's parent, Schafer Cullen Capital Management Inc. of New York.
Charles Rinaldi, who manages a small-cap mutual fund for Strong, would take over management of Mr. Schafer's funds.
Assets in the Strong Schafer Value Fund ballooned when the firms started the joint venture, but the fund has performed in the bottom fifth among mid-cap-value funds in the past three years, according to the Chicago fund-tracker Morningstar Inc.
A spokeswoman for Strong said that performance had no bearing on the decision to part ways with Mr. Schafer.
Strong, an independently owned registered investment adviser, manages more than $42 billion of assets, including about $32 billion in its Strong Funds.