BEVERLY HILLS, Calif., Nov. 30, 2005 (PRIMEZONE) -- Clipper Fund, Inc. ("Fund") announced today that its independent directors have selected a team from Davis Selected Advisers, L.P., to be headed by Christopher Davis, the firm's chief executive officer, to replace James H. Gipson and his team at Pacific Financial Research, Inc. ("PFR") as portfolio managers of the Fund effective January 1, 2006. The Fund will continue to be managed by PFR through the end of the year.
As the Fund previously reported to shareholders, the independent directors conducted a search for new portfolio managers following PFR's announcement that it intended to reorganize with Barrow, Hanley, Mewhinney & Strauss, Inc. ("BHMS"), an affiliated company, on or about January 1, 2006. The reorganization is part of a succession planning process to address the decision of three of the six principals of PFR and portfolio managers of the Fund to leave PFR on December 31, 2005.
"The Fund's independent directors conducted a search to pinpoint the best candidates to replace Jim Gipson and his team," noted Norman Williamson, independent chairman of the Fund's board of directors. "We concentrated our efforts on firms that we believed would perpetuate the investment approach that Clipper Fund has maintained over the years. After due diligence and consideration, the independent directors agreed that the team at Davis Selected Advisers, L.P. was the best choice for Clipper Fund," Mr. Williamson said.
"BHMS is an outstanding firm. However, the independent directors concluded that BHMS' approach to value investing is significantly different from PFR's unconventional definition and also features a more diversified portfolio than the PFR approach," Mr. Williamson noted. "Davis Selected Advisers' investment philosophy and approach fit well with the approach that the Fund has historically employed," Mr. Williamson said.
Mr. Williamson indicated that the Fund's investment advisory fee will be reduced substantially from the current annual fee of 1.00% of average daily net assets. Davis Selected Advisers' fee will be based on a sliding scale ranging from 0.65% of the first $500 million of net assets to 0.485% of assets greater than $10 billion; in addition, for calendar year 2006 it has agreed to voluntarily waive all management fees in excess of 0.50%. He also noted that the appointment of Davis Selected Advisers must be submitted to the Fund's shareholders for ratification prior to the end of May 2006, and that Davis Selected Advisers will bear the expenses of the shareholder meeting.
Christopher Davis said he and his partners have long admired Clipper Fund and are honored to have been selected. He added that, "as a reflection of our commitment to Clipper, and in keeping with our philosophy of investing in the funds we manage, we will invest $50 million of our own money directly into the Clipper Fund alongside the shareholders. We are committed to holding the shares for as long as we are entrusted with the fund's management."
About Clipper Fund, Inc.
Clipper Fund, Inc. (Ticker: CFIMX) is a non-diversified, open-end management investment company with shares offered for sale in the United States. The objective of the Fund is to provide long-term capital growth and capital preservation. The Fund's investment adviser, Pacific Financial Research, Inc., seeks to invest the Fund's assets primarily in common stocks of large U.S. companies that are trading at prices significantly below PFR's estimate of their intrinsic values. More information on the Fund is available at www.clipperfund.com.
About Davis Selected Advisers, L.P.
Davis Selected Advisers, L.P. is an independent money management firm founded in 1969 that employs a research-driven, long-term investment approach. The Davis family, employees and directors have in excess of $2 billion invested alongside clients in the various mutual funds managed by the firm. The firm's flagship mutual funds have consistently outperformed the S&P 500 over the long term and currently hold Morningstar's highest stewardship grade. The firm, which manages approximately $45 billion in mutual fund assets, has offices in New York City and Tucson, Arizona.