Charles Akre leaves FBR Focus Fund

The manager of one of the best-performing mutual-funds of the recent years is leaving to start his own fund. Charles Akre will quit FBR Focus Fund on Sept. 22, and plans to launch his own fund, Akre Focus Fund

Under his leadership, FBR Focus, with $1 billion in assets under management, has been one of the best-performing stock mutual funds. The fund has annualized returns of 13% since its inception in December 1996 -- placing it 10th among all U.S. stock funds during that period, and second overall among mid-cap funds, according to industry tracker Morningstar Inc.

Akre's FBR Focus has never trailed the Standard & Poor's 500 Index in any rolling five-year period.

"It's a huge loss for FBR, because he's been one of the top 10 managers of the past decade-plus across any category," said Ryan Leggio, the analyst who covers the fund for Morningstar.

Leggio added that, depending on who FBR chooses to succeed Akre, he may recommend that investors leave FBR Focus and invest in Akre's new fund. Akre was traveling Wednesday and not immediately available for comment.

Leggio said Akre told him that he decided to leave FBR so that he could take control of his own destiny. He also said he wanted to build a closer relationship with his fund shareholders. The new fund plans to offer more extensive shareholder letters and better communications, said Leggio.

The new fund, which will be part of his Middleburg, Va.-based firm Akre Capital Management, will use the same strategy he employed at FBR Focus, said Leggio. FBR Focus, classified as mid-cap growth and sporting Morningstar's vaunted five-star rating, held 27 stocks as of June 30 and is up 28.6% this year.

Despite its classification, Leggio regards Akre as a value manager with an eye for faster-growing companies.

FBR's largest stock holdings as of June 30 were American Tower Corp. , the communications and broadcast towers operator, Penn National Gaming Inc. , the regional gaming company; and 99 Cents Only Stores . Year to date, those stocks were up 17%, 56% and 34%, respectively, as of Tuesday's close.

The fund has a low portfolio turnover rate of just 17%. It held about 20% of its assets in cash as of June 30.

FBR Asset Management issued a statement about Akre's resignation, saying, "FBR Fund Advisers will continue to manage the fund and anticipates the shareholders will continue to benefit from the fund's strong performance achieved since inception."

An FBR spokesman said the firm will notify shareholders as soon as a replacement manager is chosen.

Akre filed a prospectus for his new fund with regulators in late July.