23 May 2012 Meridian Fund - Q1 2012 Commentary ( Portfolio )
We at the Meridian Funds mourn the untimely passing of our founder, Richard F. Aster, Jr.

Rick led Aster Investment Management Company, the Funds’ investment advisor, for thirty five years. His enduring legacies are building a portfolio management team and the creation and refinement of two very different investment strategies that have successfully stood the test of time. Meridian Growth Fund and Meridian Value Fund have both produced enviable returns for their shareholders, and enjoyed many accolades over their long histories. Rick also developed the techniques employed in the Meridian Equity Income Fund, which we hope will further honor Rick’s legacy of creativity and intellectual flexibility.

Several investment professionals worked alongside Rick for most of the last two decades, implementing and further refining Rick’s early work. These team members enhanced many of the processes and disciplines employed in the execution of these strategies. The Meridian investment research team remains faithful to the founding tenets and investment process for each fund, while continuously striving for further refinements. To assure continuity and quality in our research effort, the team has recently been augmented.

Kevin O’Boyle has returned to Meridian in the position of Director of Investment Research. Kevin brings over 15 years of professional investment experience, with the majority of that experience gained at the Meridian Funds. He was the Lead Manager of the Meridian Value Fund during its formative years, during which time the Fund received awards and recognition for achieving superior performance from Lipper and Money Magazine. Subsequent to his tenure at Meridian, Kevin successfully launched the no-load Presidio Fund.

William Tao, Larry Cordisco, and Jamie England now serve as Co-Managers of the Meridian Growth Fund, with William and Larry shouldering most of the day-to-day research responsibilities for the Fund. William Tao worked directly with Rick Aster on the Meridian Growth Fund for most of the past 5 years, and was recognized by Morningstar as 2010 Co-Manager of the Year: Runner-Up along with Rick. Larry Cordisco recently rejoined Meridian. Larry brings over 10 years of professional investment experience, with most of that experience gained as a valued team member on the Meridian Value Fund.

In addition to his role as Co-Manager of Meridian Growth Fund, Jamie England retains primary day-to-day responsibility for management of the Meridian Value Fund. Jamie England has over 15 years of investment industry experience and has been with Meridian for more than 10 years. He worked with Kevin O’Boyle on the Meridian Value Fund for more than two years before becoming Assistant Portfolio Manager of the fund in 2006.

Finally, Jim O’Connor is now Co-Manager of the Meridian Equity Income with Jamie England. Jim had previously assisted Rick Aster on the Equity Income Fund. Jim is also a Co-Manager on the Meridian Value Fund with Jamie England and has worked on the Value Fund since January 2004.

While the loss of such a renowned investor as Rick Aster cannot be diminished, we believe that the current Meridian investment research team maintains continuity in the Funds’ management.

Our investment strategy remains unchanged. We continue to seek out-of-favor companies typically having experienced an extended period of declining earnings. In recent years most earnings problems have been related to poor economic conditions. With some stability in the economy, albeit tenuous, we now see more companies that meet our strategy for company- specific reasons. These investments are the traditional strength and point of differentiation of the Meridian Value Fund. We seek to gradually shift the portfolio to more of these investments and expect that this should bode well for a return to the Fund’s historically strong performance levels. We hold 51 positions, representing 32 industry groups. We continue to invest in companies of all market capitalizations and our largest areas of concentration are technology, retail and transportation.

During the quarter we purchased shares of Associated Banc-Corp and KBW, Inc.