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New sector funds mulled
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March 2, 1999: 4:56 p.m. ET
Warburg Pincus may add the funds as a training ground for new managers
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NEW YORK (CNNfn) - Warburg Pincus may add new sector funds that would become a training ground for young managers, a practice already used by Fidelity Investments, the company said Tuesday.
While Warburg Pincus hasn't filed anything with the U.S. Securities and Exchange Commission, it is considering new sector offerings to go with its Global Telecommunications and Health Sciences funds, spokeswoman Leslie Mayock said.
The New York-based fund company has 34 funds with $11 billion in assets. Mayock said it is likely that Brian Posner, one of Warburg's leading managers, will be part of the new endeavor.
Warburg is waiting until it completes its merger with Credit Suisse Group in June before finalizing plans, Mayock said. The two companies said last month that Credit Suisse will acquire Warburg in a deal valued at $650 million.
Some industry experts raised questions about using funds to train young managers. Greg Wolper, an analyst at Morningstar, a Chicago fund tracker, wrote in a recent column that the practice is "insulting" to shareholders, despite Posner's impressive track record. He also questioned Fidelity's practice with its Select funds and other types of funds.
"Labeling funds as mere stepping stones in a manager's career, as Fidelity does (and not just with the Select funds), is insulting to the shareholders who entrust their money to those funds," Wolper wrote. "Let's hope that if Warburg Pincus does follow through on this idea, it won't rotate its young sector-fund managers quite as rapidly as Fidelity does."
Johanna Thornblad, a spokeswoman at Fidelity, said the company's 46 sector funds have delivered strong returns over the years. Specific figures weren't immediately available late Tuesday.
"Fidelity's system of recruiting, training and developing investment professionals has provided shareholders with proven, superior long-term returns," Thornblad said. "It's a system that's been in place for many years, and it's a system that works." 
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