BlackRock Inc (BLK.N), the world's largest money manager, switched oversight on two of its energy-oriented stock funds, which have been struggling since one co-manager, Daniel Rice, left amid controversy last year.
Robin Batchelor and Poppy Allonby, who run similar funds sold in Europe for BlackRock, will replace Dennis Walsh and Dan Neumann on the $776 million BlackRock Energy & Resources Fund (SSGRX.O) and the $391 million BlackRock All-Cap Energy & Resources Fund (BACAX.O) on March 11.
Rice co-managed the funds with Walsh and Neumann until last June when he stepped down after being criticized for a potential conflict of interest. The possible conflict stemmed from a joint venture between Alpha Natural Resources ANR.N, one of the fund's top holdings, and a subsidiary of an energy company founded by Rice and run by his sons.
Performance at the two funds has suffered amid the changes. The energy & resources fund lost 10.2 percent last year, trailing the category average for natural resource funds by 12 percentage points, according to data from Lipper, a unit of Thomson Reuters. The all-cap energy fund lost 4.1 percent, trailing the average fund by almost six points.
New York-based BlackRock said changes were made to improve investor returns. "We have been incredibly focused on making sure we are delivering performance to our clients and these consolidations are in line with that commitment," the firm said in a statement.
BlackRock also changed managers on two other underperforming stock funds, the $292 million BlackRock Mid-Cap Growth Equity Fund (BMGAX.O) and the $1.4 billion BlackRock Small Cap Growth Equity Fund (CSGEX.O).
Lawrence Kemp will take over the midcap fund from Eileen Leary and Andrew Leger.
And BlackRock's scientific active equity team, which uses quantitative investing methods, will take over the small cap fund from Leger and Andrew Thut.
(Reporting by Aaron Pressman)