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    Boston Capital

    Key Loomis comanager jumps to rival

    Kathleen Gaffney, a key member of a team that invests $82 billion at Loomis Sayles & Co. in Boston, has quit to work for cross-town rival Eaton Vance Corp.

    Gaffney was part of a team working for renowned bond manager Dan Fuss at Loomis Sayles. The group is responsible for about half of all the assets under management at the firm, including the $21.9 billion Loomis Sayles Bond fund.

    Fuss said Gaffney informed him of her resignation last Thursday. “It sounds like a good deal. I’m very sorry to lose her,” he said.


    Gaffney had worked at Loomis Sayles for 28 years and served as part of a four-member team that comanaged several mutual funds and other investments for the firm’s clients.

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    Fuss and other Loomis Sayles officials emphasized that Gaffney was only one among several members of a “full discretion” team authorized to make investment decisions for funds the group managed. They rejected the idea that Gaffney had been an heir apparent to Fuss and the investment team — though she maintained a relatively high profile in the financial world.

    “I don’t have an heir apparent for any of my duties other than looking after the coffee machine,” said Fuss.

    Jokes aside, Loomis Sayles has faced awkward questions about management succession for years. Fuss is a huge draw, one of the most highly regarded bond fund managers in America, for very good reasons. Since its inception in 1991, the flagship fund has returned an average of 10 percent a year — beating even the stock market during that period. In 2000, he was inducted into the Fixed Income Hall of Fame (yes, there really is such a thing).

    But Fuss is also 79 years old. He said he has no interest at all in retirement. “I plan to work another 30 years at least,” he told me Monday.


    So how does Loomis Sayles manage the expectations of talented subordinates like Gaffney, who had been a comanager of its bond fund for 17 years? Fuss may not have considered her an heir apparent, but many people outside the company saw her that way.

    I wondered what had been going through Gaffney’s mind, but she didn’t call me back Monday. So I asked Fuss if he thought the succession issue was a big part of the story.

    “Oh yeah,” said Fuss. “She’s a human being. She might have been saying to herself, ‘When is the old man going to get out of here?’ But she never told me that, and I consider us very close personal friends.”

    But clearly Gaffney told him the move to Eaton Vance will give her an opportunity to become a star in her own right. “This is a real loss, but for her, as she said, it’s a chance to really be her own person and spread her wings,” Fuss said.

    No doubt that’s true. But it’s not immediately clear what Gaffney will do at Eaton Vance, another Boston investment firm known for its fixed-income management. An Eaton Vance spokeswoman did not return calls yesterday.


    .   .   .

    All kinds of unusual factors can sway a company’s financial performance quarter to quarter. There are seasonal effects, industry trends, and big-picture economics. And then there is the Rush Limbaugh factor.

    Carbonite Inc. is the first local public company I can recall that blamed the radio host for slower business growth.

    Executives at Carbonite, which offers online computer backup services to individuals and small businesses, cited their decision to stop advertising during Limbaugh’s show as a leading reason why revenue growth at the Boston company slowed during the second quarter of this year.

    Among other questions: What happened over the subsequent three months? We’ll find out Thursday, when Carbonite reports its results for the third quarter. Carbonite was among dozens of advertisers that dumped Limbaugh earlier this year, after the radio host slimed Georgetown student and birth control advocate Sandra Fluke, describing her as a “slut” and a “prostitute.”

    A few months later, Carbonite chief executive David Friend told analysts the company’s growth rate slowed during the second quarter due, in no small part, to the fact “we stopped working with one of our top-producing radio endorsers.” Friend didn’t mention Limbaugh by name, but that’s who he meant.

    Friend told analysts in August Carbonite had signed up new radio personalities but it takes three to six months to “ramp up” those hosts. “So we probably won’t see the full effects of this for another quarter or two,” he said.

    Watch for an update this week.

    Steven Syre is a Globe columnist. He can be reached at