Charles Cavanaugh, Who Helped Run Davis Stock Funds, Dies at 39

Jul 31, 2014 7:00 pm ET

Aug. 1 (Bloomberg) -- Charles Cavanaugh, who spent more than a decade as a fund manager, trader and research analyst at Davis Selected Advisers LP in New York, has died. He was 39.

He died on July 15 at his home in San Antonio after a long battle with cancer, according to a paid notice yesterday in the New York Times.

A graduate in theology, Cavanaugh helped run the Davis Financial Fund from 2007 to 2012. As co-manager, he succeeded Christopher C. Davis, son of the Tucson, Arizona-based company’s founder, Shelby M.C. Davis.

“Words cannot express the profound respect, trust and affection that all of us feel for Charles,” Christopher Davis and Kenneth C. Feinberg, another co-manager at the time, wrote when Cavanaugh left the firm in a 2012 commentary for investors. “He has worked tirelessly to improve our analysis and understanding of financial companies. But even more, he has worked to strengthen our process and reinforce our culture.”

The Davis Financial Fund, the firm’s second-largest mutual fund, had $679.4 million in assets as of July 30, according to data compiled by Bloomberg. Described by the company as a “long-term capital appreciation” fund, its top holdings were American Express Co. and Wells Fargo & Co.

Under Cavanaugh, the fund weathered the financial crisis better than its industry competitors, according to the company. In 2008, when the Standard & Poor’s 500 Index fell 38 percent, the Davis Financial Fund added a net $112 million in new investment from customers, according to a portfolio-manager update last year.

‘Thank You’

“This occurred at a time when the industry experienced an all-time record level of net redemptions,” it said. “During 2009, 2010, 2011 and 2012, the Fund experienced very manageable net redemptions. Thank you.”

Cavanaugh managed other Davis funds, including its Opportunity, International and Selected International funds, according to MorningStar, a Chicago-based investment research company. He was also a portfolio manager of the John Hancock Funds II and stepped down in March 2012, replaced by Feinberg, according to a filing with the Securities and Exchange Commission.

Davis Selected Advisers was founded in 1969 and offers its clients mutual funds, variable annuities, separately managed accounts and offshore funds, according to its website. Its biggest fund, the Davis New York Venture Fund, had net assets of $20.4 billion as of July 30 and has been in operation since 1969.

Fund Relationship

John Hancock is a unit of Toronto-based Manulife Financial Corp. and uses investment managers at mutual-fund companies such as Fidelity Investments, Franklin Templeton, T. Rowe Price Associates, as well as Davis.

Charles Ahern Cavanaugh was born on June 12, 1975, in Minneapolis to Mike and Zoe Cavanaugh.

He attended Jesuit High School in Portland, Oregon, before earning degrees in political science and theology at the University of Notre Dame in Indiana in 1997, according to the Times notice. He joined Davis in March 2001, according to another SEC filing.

Cavanaugh’s survivors include his wife, the former Emilia Gamez, whom he married in 2006; son Aidan; brother John; sister Elizabeth; and both parents.

--With assistance from Stephen Miller in New York.