America’s best-selling poet is a Muslim theologian who died 750 years ago. Jalal ad-Din Muhammad Rumi (alternately, Mevlana Jalaluddin Rumi) is not only namesake to Beyonce’s new child, but also founder of Sufism, a branch of Islam. Sufism is both mystical and ecstatic. Rumi was given to a whirling dance that reflects the boundless joy and energy that overwhelms a believer; it helped believers express and achieve ecstasy, was codified by his son and practiced by dervishes, literally “poor monks.” They became famous as whirling dervishes, who spun with an almost unhuman grace, energy and tenacity.
I thought of them as I read of Turner Investment Partners recent announcement of the closure of their last three actively-managed mutual funds. Turner was founded in 1990 was renowned for their aggressive style of growth investing, primarily in smaller U.S. firms. But those haven’t been the only arrows in the Turner quiver. Here’s a quick quiz: which of the following is a fund that Turner hadn’t already launched and liquidated?
- Turner Core Growth 130/30: 130/30 funds were all the rage in the mid2000s despite being a dumb idea. Turner closed theirs in 2008.
- Turner Global TMT: only half-credit here. Global TMT was one of Turner’s hedge funds. It builds on the tradition of Turner Wireless & Comm which dropped 81% in its last year of existence, 2001, and was merged into their B2B internet fund. Remember those?
- Turner Market Neutral: nope, they ran a decent market neutral fund through 2014 but drew only $3 million in assets.
- Turner Shariah-compliant Growth: ding, ding, ding! Two outside investors, including “His Excellency Abdul Jabbar Al Sayegh of Abu Dhabi, Chairman and Chief Executive of Al Sayegh Brothers Group of Companies,” praised Turner’s global growth strategy for both its high quality and compatibility with a Sharia-compliant portfolio, but the firm never launched a fund dedicated to the strategy.
- Turner Core High Quality Fixed Income Fund: nope, they had a series of sub-advised conservative fixed-income funds, including this one and several short-term bond funds, around the turn of the century.
Turner was founded at a time when a number of very smart, very ambitious managers all looked to become The Next Ned Johnson. Dick Strong aspired to the role. Tom Marsico, Bill Nasgovitz, Jim Oberweis and Garrett van Wagoner likely did.
And, most plausibly, so did Rob Turner. You get a sense of Turner’s drive and ambition not by looking at the funds they’re liquidating, but at all of the Turner funds that have preceded them. After a long slog through the SEC Edgar database, I think this is a nearly-comprehensive roster.
Turner All Cap Growth Fund
Turner B2b-Ecommerce Fund
Turner Concentrated Growth Fund
Turner Core Growth 130/30 Fund
Turner Core High Quality Fixed Income Fund
Turner Emerging Growth Fund
Turner Emerging Markets Fund
Turner Future Financial Services
Turner Global Opportunities Fund
Turner Global Top 40 Fund
Turner International Growth Fund
Turner Large Cap Growth Fund
Turner Large Growth Fund
Turner Market Neutral Fund
Turner Medical Sciences Long/Short
Turner Micro Cap Growth Fund
Turner Midcap Equity Fund
Turner Midcap Growth Fund
Turner New Enterprise Fund
Turner Quantitative Broad Market Equity Fund
Turner Quantitative Large Cap Value Fund
Turner Short Duration Government Funds: – Three Year Portfolio
Turner Short Duration Government Funds: – One Year Portfolio
Turner Small Cap Equity Fund
Turner Small Cap Growth Fund
Turner Spectrum Fund
Turner Strategic Growth Fund
Turner Tax Managed Us Equity
Turner Technology Fund
Turner Titan Fund
Turner Titan Long/Short
Turner Top 20 Fund
Turner Ultra Large Cap Fund
And now, we turn turn turn to the next Turner: in the past 10 years, Turner lost 99% of its assets under management (“Two Fallen Fund Firms Merge,” Barron’s); dozens of funds have come and gone; active funds are out, ETFs are in; “quantitative” is out, “multifactor” is in. They added European funds and Middle Eastern investors, filed for an IPO, withdrew the filing for the IPO, cut bonuses, sued departed employees, merged with one firm and acquired two more.
Turner acquired Elkhorn Capital Group in August, 2017. Elkhorn’s founder drove a major move into ETFs at his previous employer, the Invesco Powershares, but has had minimal market success with Elkhorn’s ETFs. Elkhorn gives Turner quick entre into ETFs, Turner gives Elkhorn is brand name and marketing muscle. “Turner was introduced to us as they were going through a metamorphosis,” according to Elkhorn’s Ben Fulton.
It will be fascinating and instructive. Joseph Schumpeter celebrated capital’s “gale of creative destruction,” it’s penchant for blowing away what used to work in order to clear space for what might work next. It’s clear that Turner’s previous reinventions availed little; perhaps this one will finally give the industry an example of their future.
Or, perhaps, the whirling dancers will finally fall. Stay tuned.