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JANUARY 2008 • emii.comJANUARY 2008 • emii.com20 Rising Stars of Mutual Funds

JANUARY 2008 MUTUAL FUND RISING STARS 3

M

6 Untraditional ThinkingBy Mark MalyszkoThe mutual fund industry increasingly is lookingtoward non-traditional investments for future growth.As a result, expect to see more original productdevelopment, wider use of exchange-trade funds andan expanded array of global opportunities.

8 Pay For PerformanceBy Mark MalyszkoFund manager compensation is likely to hold steadyfor most, but a greater number will see their bonusestied to performance.

10 20 Rising Stars of Mutual FundsBy Mark MalyszkoThe inaugural 20 Rising Stars of Mutual Funds show-cases up-and-coming executives holding a variety ofposts, including portfolio management, product devel-opment, marketing and relationship management,who are likely to impact the mutual fund industry inthe years to come.

26 Mentors’ PageDedicated to the mentors, who inspired, challengedand cultivated the skills and character necessary togive rise to this year’s group of Rising Stars.

Untraditional Thinking

Table of Contents

6

19RISING STAR

ZACH LIGGETT


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EDITORIAL ERIK KOLB

Editor of Business Publishing

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Editor’s NoteWelcome to the first annual issue of 20 Rising Stars of Mutual Funds,showcasing up-and-coming professionals nominated by their peersand selected by our staff as future leaders and trendsetters of themutual fund industry.

While 20 Rising Stars of Mutual Funds is meant to honor industryexecutives around the globe, the finalists in our inaugural edition arealmost exclusively from the United States. Perhaps that says some-thing about the talent domestically, or perhaps it says something aboutthe proactiveness of their peers in nominating them for this honor.Regardless, several of the finalists still manage to bring internationalflavor to the mix either through working in the U.S. office of an interna-tional manager or through having worked abroad in the past (see cov-erage beginning on page 10).

As with all the titles in our Rising Stars series, 20 Rising Stars ofMutual Funds also includes features onthe industry and compensation. Our indus-try overview addresses how mutual fundcompanies increasingly are looking towardnon-traditional investments for futuregrowth (see story, page 6). In compensa-tion, we reveal that base pay is likely tohold steady for most fund managers, but agreater number will see their bonuses tiedto performance (see story, page 8).

Another regular feature is our Mentors’Page. Submitted by our finalists, theseindividuals are recognized for inspiring, challenging and cultivating theskills and character necessary to make our Rising Stars who they aretoday (see page 26).

20 Rising Stars of Mutual Funds is the latest in a series of specialsupplements produced by Institutional Investor News exclusively forour newsletter subscribers. While it may be easy to point out those atthe top of their field today, how many know who is going to rise to thetop and become the leaders of tomorrow? IINews and our RisingStars series seek to give our readers that edge. For more information,email [email protected].

All the best,

Erik KolbEditor of Business PublishingInstitutional Investor News


MUTUAL FUNDSAndrew Arnott

Brendan Caldwell

Eric Cinnamond

Michael Coffey

Wayne Collette

Stephen Dodson

Andrew Feltus

Timothy Fidler

Corey Gilchrist

Manind Govil

Carey Foran Hoch

Justin Lannen

Zach Liggett

Jeremy May

Jeffrey Miller

Sandy Rufenacht

Monem Salam

Charles Stewart Todd

Alejandro Vallecillo

Jason Weiner

Our 20 Stars

FROM THE PUBLISHERS OF:

From the publishers of:

4 MUTUAL FUND RISING STARS JANUARY 2008


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Covering professional ethics, performance measurement, and the GIPS® standards,the CIPM program will help you demonstrate expert status — to yourself, to your firm,and to your clients.

See how the CIPM program measures up. Visit www.cfainstitute.org/cipm.



T HE MUTUAL FUND INDUSTRY isevolving. While traditional investmentsremain the most popular, industryobservers and fund managers said thefuture for fund companies and investors

is in less traditional investments.

Investor concerns, volatile markets and regulatory pressures arechanging the way portfolio managers look at how to best achievereturns for investors. These realities are resulting in more thinkinggoing into the risk management of fund portfolios. As a result, long-term, low-cost investment strategies are getting more attention.

Whether they are becoming more of a priority and whether it issoon enough is at the heart of a debate about the U.S. fund indus-try’s future. Observers said that, first and foremost, the industryneeds to be open to new products and fund companies need toembrace different strategies, such as ones involving the non-tradi-tional but expanding arena of exchange-traded funds (ETFs).

According to Steven Miyao, CEO of consulting and research firm

kasina, the challenge for the industry as a whole and for individualfund companies that want to stay ahead is original product creation.“They should develop more products,” he said. “The majority ofasset managers are not developing new products.”

Instead, most fund managers are launching products in existing cat-egories. If, for example, a fund decides it is missing mid-cap valuestocks and expands there as a result, all it is doing is launching aproduct that is already there. “You don’t just want to develop a lot ofproducts,” he added.

When fund companies go the route of competing based on what isworking for others, they are left with performance as the decidingfactor in competition. By itself, that does not give many fundsenough of an edge, Miyao said.

Thinking Outside the BoxCreating something new, however, is tricky. The industry will findsomething that’s hot and go after it without being different becausefund managers are caught up in traditional style boxes. “That’sexactly the problem firms are having,” Miyao says. “There’s always ahot product right now and that always changes.”

As a result, many fund companies will develop many products everyyear that may not stand out. Some mutual funds, however, succeedin what Miyao called true innovation. He pointed to Vanguard’slow-cost index funds, which have been hailed for their 0.18%expense ratio. The Vanguard 500 Index Fund, which has $120 bil-lion in net assets, is one of the largest mutual funds.

Fund managers agreed. “Investment product churn also islikely to increase as the industry continues to launch special-ized products whose shelf lives are limited to the popularity ofthe investing fad du jour,” said Zach Liggett, portfolio man-ager at Financial & Investment Management Group inTraverse City, Mich. “Hopefully, investment management-focused—rather than marketing focused—boutique managerswill continue to thrive in this environment by competing ona broader value proposition encompassing philosophy, processand people rather than solely on price.”

Untraditional ThinkingThe mutual fund industry sees original product development, ETFs and global investments as the wave of the futureBy Mark Malyszko



ETFs for EveryoneVeteran industry observer and fund managerBill Donoghue said a lot of interesting thingsare happening in the mutual fund industrytoday because more fund managers are gettingin tune with what customers want and need.Still, open-mindedness needs to set in andbecome more prevalent.

According to Donoghue, the challenge forfund managers is to drop the pre-disposednotions that what has worked in the past, suchas traditional varied stock portfolios, is going toalways be the best approach in the future.“ETFs really are the future,” he said. “Mostadvisors are still looking at them as cheap indexfunds because that’s all they know how to do.”

Out of about 600 mutual fund families,only about a dozen are in the ETF businessand only half of those are in it in any significant way,Donoghue noted. According to ETFtrends.com, Barclays stillleads all ETF providers with more than half of all ETF assets -about $325 billion. State Street Global Advisors (SSgA) followswith about $130 billion. Other leaders include Vanguard,which in December launched a trio of mega-cap ETFs that arefocused on the 300 largest market cap stocks.

Assets in the 612 U.S. domestic ETFs in November totaled $576billion, which was down $8 billion from the $584 billion at the endof October, according to the most recent statistics available fromSSgA. While there is a warming trend to ETFs, Donoghue pointedout that it has been slow going because they are not yet treated in ameaningful way by Morningstar’s rating process, which sees them asjust a sliver of the $12 trillion in mutual fund assets.

Going GlobalThe U.S. fund industry also is beginning to look more at globalinvestment strategies. Some believe, however, that funds are notcatching on to international opportunities quickly enough and thatthey are limited by U.S. law from going as far as they can in theglobal community.

The U.S. fund industry lobby, the Investment CompanyInstitute, has acknowledged a lag in the U.S. compared withinternational investments by European mutual funds. InDecember, it wrote a letter to the U.S. Department of theTreasury stating that, in the global landscape, the U.S. fundindustry share is shrinking. And it pointed to a strategy used inEurope—investing in UCITS, or Undertakings for CollectiveInvestment in Transferable Securities—as a growth area the U.S.fund industry can embrace if it was allowed to do so.

UCITS are banned under the U.S. Investment Company Act. Onereason is that a UCITS approach does not require a fund companyto have a board, which the 1940 law requires. The ICI request was

prompted by an invitation from TreasurySecretary Henry Paulson for suggestions onhow the fund industry can be changed.

International investing has been an area ofgrowth for U.S. ETFs, Donoghue noted. Hepointed out, however, that only the BarclaysETF fund invests in Canada and Mexico, forexample. Nonetheless, ETF funds are look-ing to have European counterparts.

Donoghue added that regulatory limitationsexist for U.S.-only strategies as well. Forexample, if a fund’s prospectus states that it issmall-cap, then it cannot go into a large-capstrategy even if the fund believes that is theway to maximize its performance.

Compliance and performance factor intomanaging that portfolio and could restrict its

growth. The answer, according to Donoghue, is to tell investorsabout international investments more and make more investmentsin foreign currencies. “What are they selling now? They’re sellinglifecycle funds,” he said.

Meanwhile, in Canada, fund companies are beginning to lookbeyond the U.S. for expansion. Brendan Caldwell, presidentand CEO of Caldwell Investment Management in Toronto,said the company will look to expand its presence overseas withmore offices in different countries. The company, which nowhas an office in the United Kingdom, also will embrace inter-national investments more forcefully.

Becoming the Alpha DogAlpha, based on risk-adjusted returns, and high-yield invest-ments are strategies to which fund managers are lookingahead domestically.

Funds such as UBS Asset Management’s Dynamic Alpha Fund,which this past summer beat market indices, have been successful.There are challenges, however, because the risks associated withalpha, which is common in hedge fund investing, strays from themutual fund industry’s traditional market neutral approach.

“You’re supposed to not deviate from the benchmark, but you’resupposed to generate alpha,” said Eric Cinnamond, v.p. and portfo-lio manager for Intrepid Capital Funds in Jacksonville, Fla. “It’s real-ly hard to do both.”

Others see a middle-of-the-road approach as the smartest directionfor fund companies to take. Sandy Rufenacht, chief investment offi-cer and principal owner of Three Peaks Capital Management inGreenwood Village, Colo., believes the future for the industry is anintermediate asset class because it has less volatility than the stockmarkets but is still high yield. “It’s a wide-ranging asset class,” hesaid, adding that it can grow massively. i

“You’re supposed

to not deviate

from the bench-

mark, but you’re

supposed to gen-

erate alpha. It’s

really hard to do

both.”— Eric Cinnamond



C OMPENSATION FOR MUTUALfund portfolio managers and others isexpected to remain steady in the U.S.,despite the credit crunch and mort-gage crisis, according to recruiters and

industry observers. Increases in base pay are likely at thelargest fund companies, following a general trend of increas-ing compensation by 5-10% per year. Where the tighteningmay occur is with bonuses as more firms look to tie them toperformance, observers said.

Barry Emen, president of MJE Recruiters in FlorhamPark, N.J., said his projection for this year is for a levelingoff in some areas, such as for mutual fund administratorsand presidents. “We’re probably going to hit a ceilingthere,” he noted.

Emen, however, agreed that compensation is not likely toslip. “Compensation will be steady,” he said. He anticipatestop fund companies will pay more for top talent, but every-where else increases will be slower. Even though observersand recruiters agreed that the current mortgage crisis is notlikely to have a significant impact on mutual fund compen-sation, fund companies generally will be more cautious in aslowing economy, in particular with hiring.

Emen believes that the sectors of the fund companies’investments, the size of those firms and the overall stockmarkets will all play into what extent the impact of the sub-prime fallout will have. For example, firms may be moreresilient to curtailing growth in compensation packages forportfolio managers invested in biotech or energy stocks thanfor those invested in financial services, he explained.

“Hiring may be curtailed,” Emen said. “The overall hiringtrend this year will be steady to down.” Boutique firms,

Pay ForPerformanceFund manager compensation is likely to hold steady for most, but a greaternumber will see their bonuses tied to performance By Mark Malyszko



however, may spend extra to bring theright people on board, he noted.

Bonuses and Fund PerformanceObservers and fund managers alike seebonuses being tied more to funds’ per-formance, mirroring the hedge fundindustry, in a trend that will continueto become more pronounced. There is atrend of hedge fund pay structures hav-ing more of an impact on other moneymanagers, including but not limited tomutual fund managers, they said.

The norm for hedge fund and alterna-tive investment pay structures is adirect correlation to the fund’s per-formance—what is commonly referredto as sharing in the fund’s profits. Sucha structure may include the fund man-ager getting a portion of the fund’s fees,said one observer.

In a survey by the CFA Institute of its membership, 27% ofrespondents said their bonus is driven by their firm’s per-formance and 46% said it is driven by the individual’s per-formance. While the survey’s approximately 13,500 respon-dents represent a wide array of investment managers, includ-ing hedge fund managers and retirement plan advisors, thetrend is seen as representative of the mutual fund industry.

According to the survey, cash bonus eligibility remains high,with 90% of U.S. respondents in the survey stating theywere eligible. Only 42%, however, stated they were eligibleto receive what the survey described as long-term incentives,including non-cash bonuses such as share options.

Peggy Eisen, managing director of the CFA Institute’s mar-keting and communications department, said the findingsshow strong ties between bonuses and how firms and indi-viduals perform, and that way of approaching bonuses is notlikely to change.

Beyond firm and individual performance, 22% of respon-dents ranked the performance of their business unit as thekey determinant in bonuses. Four percent of respondentssaid they were not sure on what their bonus was based.

Compensation by the NumbersCompensation for U.S. portfolio managers varies greatlybased on the type of portfolio managed, as well as the man-ager’s years of experience, according to the CFA Institutesurvey. Equities portfolio managers earned the most in2006, an average of $456,000, including bonus and long-term incentives. They were followed by fixed-income port-folio managers, who earned $250,000 in total compensa-

tion, and by managers of indexed and‘other’ portfolios, who earned $158,000,according to the survey.

Broken down by years of experience, equitiesportfolio managers with more than 10 yearsexperience earned an average of $499,000,followed by those with five to less than 10years, who earned a total of $398,000 onaverage, and those with less than five yearsexperience, who earned $205,000, the surveyfound. In the fixed-income realm, the num-bers were $350,000 for more than 10 years,$210,000 for five to 10 years and $126,000for less than five years of experience.

For managers of indexed funds, the paywas notably less, even where they hadmore than 10 years of experience - just$190,000 on average. For five to less than10 years, the figure was $135,000 and, forthose with less than five years, it fell

below six figures to $87,000.

The International LandscapeCompared with portfolio managers in Canada and theUnited Kingdom - the only other two of the total 11 coun-tries for which the survey broke down types of portfolios -U.S. managers made more across the board, except for U.K.fixed-income managers with more than 10 years experience.The most experienced fixed-income managers in the U.K.earned an average of US$437,000—more than the mostexperienced Canadian and U.S. fixed-income managers andalso more than U.K. equities portfolio managers, whoearned US$348,000.

The U.S. ranked lower than most of the other countries infund manager cash bonus eligibility, tied with Canada forseventh place at 90%. Canadian fund managers, however,were less likely than U.S. managers to receive non-cash long-term incentives. Only 32% stated they were eligible.

Ranked in first place for cash bonus eligibility in the surveywere the U.K. and Switzerland. Ninety-six percent ofrespondents from both countries stated they were eligible.Swiss financial services firms, however, were less likely toaward non-cash long-term incentives. Only 35% of respon-dents there stated they were eligible for these, comparedwith 47% of those in the U.K.

Long-term incentives are the most popular in South Africa, where50% of respondents stated that they were eligible to receive them.They were the least popular in China, where only 17% indicatedthey could get long-term incentives. Australia ranked lowest forcash bonus eligibility, with only 86% of respondents stating theycan receive such incentives. i

There is a trend

of hedge fund

pay structures

having more of

an impact on

other money

managers,

including but not

limited to mutual

fund managers.



By Mark Malyszko

Institutional Investor News’ inaugural issue of 20 Rising Stars of Mutual Funds showcasesup-and-coming mutual fund executives – holding a variety of posts, including portfolio management, product development, marketing and relationship management, at compa-nies around the globe – who are likely to impact the investment management industry in the years to come.

Nominees are submitted by professionals throughout the mutual fund industry and are vet-ted and selected by our editorial staff. The selected individuals meet the criteria of havingdemonstrated expertise, dedication and consistency in their careers, indicating they willlikely be the trendsetters of the future.

Our winning nominees manage and contribute to the management of funds at firms over-seeing a total of more than $400 billion in assets and investments. Their specializationsinclude annuities, fixed income, international equities, separately-managed accounts, retailand institutional accounts, retirement accounts, fund administration and technology.

Other noteworthy points about our Rising Stars:• 60% are chartered financial analysts (CFAs) and one is a certified

investment management analyst;• 40% have an M.B.A. and 15% have master’s degrees in another area;• 25% work in Boston, 20% in New York City, 15% in Colorado and the rest in

seven other states across the U.S., with the lone international representative working in Toronto;

• 15% listed Warren Buffett as a mentor or said he inspired them;• One is a CEO and another is a chief operating officer;• 10% work for their fathers;• 40% said they still plan to be at their current firm in 10 years;• Their average age is 36 (the youngest being 31 and the

eldest being 42).

Selecting the final 20 Rising Stars was a difficult task, as many outstanding individuals were nominated. We would like to thank the nominees and those who nominated them for making this list possible, and we look forward to charting the professional progress of our Rising Stars in the years to come.

So, without further ado, here are our Rising Stars, listedalphabetically by surname.

MUTUAL FUNDS



1.ANDREW ARNOTTSenior Vice President, ProductManagement and DevelopmentJohn Hancock Funds, BostonAge: 35Education: Boston University (B.S. inBusiness Administration); NortheasternUniversity (M.S.F. in Finance) Mentors: Keith Hartstein, President andCEO, John Hancock Funds; JamesShepherdson, President, AXA Distributors

Arnott is responsible for the manage-ment, positioning, development andrationalization of John Hancock’s U.S.-based open-end funds, closed-endfunds and separately-managedaccounts and oversees $52 billion inassets under management. He joinedJohn Hancock Funds in 1993 in productdevelopment and, in 1998, became av.p. and director of marketing andproduct development, overseeingdevelopment of mutual funds andannuities. He has held his current postsince February 2005.

Arnott has spearheaded acquisitions,adoptions and strategic asset manage-ment partnerships for all of JohnHancock’s retail and institutional prod-uct lines, describing his biggest chal-lenge as finding ways to propel thefunds forward. In the 1990s, he andthen-Chairman and CEO Maureen Fordspearheaded the development of afund adoption strategy, the basicpremise of which was adopting institu-tional money managers that did nothave retail distribution as sub-advisors—a strategy emulated by other funds.

“We came along and proposed a strate-gic transaction where we acquired thefund,” Arnott said. “John Hancockbecame the advisor, and the people wewere buying from became the sub-advi-sor.” One such transaction, which Arnottcalled a landmark deal, was JohnHancock’s adoption in 2005 of eight

GMO fundsthrough a sub-advisory arrange-ment, in whichGMO became asub-advisor to vari-able annuities andretirement plan-ning at JohnHancock and tonew portfolios forthose platforms.“We continue toexecute this strate-gy,” he added.

Arnott, who hasspoken about product development atthe Massachusetts CPA Society, said thefunds that will gain market share in 10years are those that build retirementstrategies. Having overseen the develop-ment of a retirement income strategyproject at John Hancock, he noted thatthere is a shift in retirement asset alloca-tion to alternatives, such as endowment-type investments, because of investors’mentality of living off savings.

Arnott said the company he mostadmires is Eaton Vance. “Their ability toread market demands has been incredi-ble,” he added. But he calls mentorHartstein, with whom he has worked atHancock for 15 years, his best boss. “Ipretty much grew up at John Hancock.”

2.BRENDAN CALDWELLPresident and CEO Caldwell Investment Management,TorontoAge: 37Education: Trinity College at theUniversity of Toronto (B.Sc.); Universityof London (M.A. in English Literature)Mentors: Thomas Caldwell, Founderand Chairman, Caldwell Financial;Michael Lee-Chin, Chairman, AICLimited; David Picton, Portfolio

Manager, Synergy AssetManagement

Caldwell was recruited to his currentfirm in 1995 from RBC DominionSecurities, where he was an invest-ment advisor, by his father, who hecalls his best boss. “We work verymuch as a team at Caldwell,” he said.“He has an extraordinary vision forwhat will unfold.” For example, theCaldwell American Fund shifted to aglobal focus due to the strongCanadian dollar and was re-launchedby Caldwell in 2006 as the CaldwellExchange Fund, which has been thetop performing global equity fundsince its inception.

In September 2004, Caldwell tookover management of the CaldwellCanada Fund and changed it froma primarily large-cap fund to “moreof a price momentum fund” focusedon the best performing stocks inCanada, which resulted in it becom-ing the best per forming equitiesfund in Canada in 2006. In addition,he serves as portfolio manager forthe Caldwell Balanced Fund, thetop-performing ba lanced fund inCanada in 2006, and is the presidentof Caldwell Securities, which withCaldwell Investment Managementservices private clients, municipali-ties, charities, foundations and pub-lic companies.

Caldwell sees more of an internationalpresence for the firm within the

1.ANDREW ARNOTT

2.BRENDAN CALDWELL



decade, with more offices overseasbeyond its existing one in New York andits affiliates in Bermuda and the UnitedKingdom. “I would hope we wouldhave expanded our scope,” he said,adding that 10 years from now he seeshimself still working at his current firm inthe same office on that initiative. Hebelieves that, in 10 years, global com-petition will have advanced to thepoint where it’s no longer sufficient tohave an America-only or America-cen-tric view of the world.

Caldwell is a chartered financial ana-lyst, a fellow of the CanadianSecurities Institute and a member ofthe CFA Institute and the TorontoSociety of Financial Analysts. He fre-quently serves as a financial commen-tator and sits on various charitableboards. Besides Caldwell InvestmentManagement, he admires the strate-gies AIC uses in Canada, which is tolook at exchanges as stocks. “We’veextrapolated that idea,” he added,noting that his firm has been addingsuch stocks to its portfolios.

3.ERIC CINNAMONDVice President and PortfolioManagerIntrepid Capital Funds, JacksonvilleBeach, Fla.Age: 36Education: Stetson University (B.B.A. inFinance); University of Florida (M.B.A.) Mentors: Nola Maddox Falcone,Former President, Co-CEO andPortfolio Manager, Evergreen AssetManagement; Mark Travis, CEO,Intrepid Capital Funds

Cinnamond has been with IntrepidCapital Funds, where he oversees theIntrepid Capital Small Cap Fund, since1998. Prior to joining Intrepid, he was asmall cap analyst at Evergreen AssetManagement for two years, as well asco-manager of the Evergreen SmallCap Equity Income Fund. Each year

that he was withEvergreen, the fundwas selected toBarron’s Top 100Mutual Funds, theannual rankings basedon risk-adjustedreturns. Prior toEvergreen, he was aportfolio manager inthe capital manage-ment group of FirstUnion National Bankfor three years. He is achartered financial ana-lyst and a member ofthe CFA Institute.

According toCinnamond, a test forfund managers is notgetting backed intocertain sectors as aresult of following therest of the industry anddoing things independ-ently for clients. “Thebiggest challengealways is not beingforced into the heard of Wall Street,” hesaid, citing the 1999 tech bubble as anexample of where his firm steered clear ofthose stocks because their valuation wastough to gauge. He noted that his and hisfirm’s strategy has always been valuation-based, with a focus on good balancesheets and free cash flows. “I hope in 10years the investment community isfocused on absolute return,” he added.

Cinnamond has spoken at the Universityof Florida’s Master of Finance SpeakerSeries and Stetson University’s RolandGeorge Investment Program and regu-larly provides financial commentary onBloomberg TV and on CNBC. He said hebecame interested in stocks by watch-ing nightly business reports with his grand-father. The company he most admires isOil Dry - the market leader in cat litter,with its well-branded Fresh Step product– which he described as a stable, family-run business that provides a nice divi-dend. “It’s everything we like in a busi-ness,” he added.

Cinnamond said his best boss would beeither of his mentors, but he cited Travis in

particular. “He gives us flexibility,” he said.“He questions our ideas but…he empow-ers all of the analysts here.” Cinnamondsees himself at Intrepid in 10 years, adding,“Once you become a fund manager,there is nowhere else to go unless youwant to join a hedge fund.”

4.MICHAEL COFFEYManaging Director and Head ofRetail DistributionMainStay Investments, New YorkAge: 39Education: University of Notre Dame(B.S. in Science)Mentors: Christopher Blunt, SeniorVice President and Chief OperatingOfficer, Life and Annuity Operations,New York Life Insurance

Coffey has been in charge of all ofMainStay’s funds across all channelssince February 2007, as well as distribu-

3 .ERIC

CINNAMOND


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tion of managed accounts from theseven institutional boutique managersthat comprise New York Life InvestmentManagement. He joined MainStay fromBlackRock in 2004 as national salesmanager and currently sits on its man-agement committee. He joinedBlackRock in 1997 as an internal whole-saler and, throughout his time there,managed the sales desk, worked side-by-side with the national sales manag-er, ran various accounts and was incharge of closed-end fund originationand distribution.

Coffey, a certified investment manage-ment analyst, said the biggest chal-lenge for him was rebuilding the distri-bution business at MainStay. As part ofa firm-wide initiative led by Blunt, hehelped implement the strategy of look-ing beyond product development, hir-ing good senior wholesalers and imple-menting what he describes as business-building tools, which resulted in salesgrowth of 67% from 2004 to 2005 and31% from 2005 to 2006.

One of those tools is cross-generation,or trying to keep relationships with fam-ily members of the clients of advisorsthe firm engages. Coffey said the firmteaches its advisors how to maintainthose relationships and grow the assetsof advisors’ top clients.

Coffey himself would like to expand hisresponsibilities beyond mutual fundsinto other areas of asset management.“In 10 years, I see myself as president ofan asset management company,” hesaid, adding that the industry is facingthe continuation of a trend of lifestyle-based investments and hopefully prod-uct diversification.

Coffey credits Blunt with promoting aculture of excellence at MainStay andNew York Life and with being “a truevisionary” who really understands whatis occurring in the business. He notedthat, while Blunt was head of retail distri-bution prior to being promoted this pastMarch, he taught him how to have agreat distribution mind.

Prior to BlackRock, Coffey worked inpharmaceutical sales at Marion Merrell

Dow, a pharma-ceuticals manu-facturer and mar-keter based inKansas City, Mo.He has been aspeaker at variousc o n f e r e n c e s ,including MoneyM a n a g e m e n tInstitute andN a t i o n a lI n v e s t m e n tCompany ServiceAssociation events.

5.WAYNE COLLETTEPortfolio ManagerColumbia Management, Portland, Ore.Age: 38Education: Columbia UniversityBusiness School (M.B.A.)Mentors: Bruce Greenwald, Professor,Columbia University Business School;Laura Sloate, Adjunct Professor,Columbia University Business School

Collette oversees the ColumbiaTechnology Fund, an all-cap fund with$351 million in assets, and ColumbiaSmall Cap Growth I, a small-cap growthfund with $262 million in assets. He alsomanages more than $1 billion in assetsacross variable annuity portfolios, com-mon trust funds, separately managedaccounts, individually managedaccounts and sub-advised accounts.

Collette describes his biggest accom-plishment as growing the ColumbiaTechnology Fund to more than $750million. “When I started managing thetech fund in July 2002, it was an $8 mil-lion fund that was down more than60% from inception,” he said. “Wechanged the strategy from one ofbeing benchmark-focused to onewhere we looked for absolute returns on every stock we purchased.” That

strategy included looking for non-tradi-tional tech stocks and expanding to aglobal focus, he noted. The resultingimpact was the fund earning the Lipperaward for the No. 1 fund over a five-yearperiod for 2005 and 2006.

In the industry, Collette sees a shift awayfrom market neutral strategies. “The mar-ket is starting to realize that market-neutralfunds generally have a long bias ratherthan really being market-neutral,” he said,noting that most lost money in August2007. “As a result, the industry will likely befurther segmented into relative- andabsolute-return categories. When clientswant market exposure going forward,they are likely to determine the amount ofexposure they want and allocate that toa relative-return product.”

Prior to joining Columbia Management in2001, Collette was an associate portfoliomanager at Neuberger Berman from 1999through 2001, and an assistant v.p. andequity research analyst at SchroderCapital Management from 1997 through1999. He said he chose the professionbecause of the challenge of understand-ing the markets and individual stocks, aswell as wanting to learn something neweach day.

A chartered financial analyst, Collettepoints to Apple as the company he mostadmires. “To be able to innovate consis-tently with high-value products in a verycompetitive category, especially given thesize and breadth of the company, is veryimpressive to me,” he said.

4.MICHAEL COFFEY

5.WAYNE COLLETTE



6.STEPHEN DODSONChief Operating OfficerParnassus Investments, San FranciscoAge: 30Education: University of California atBerkeley (B.S. in BusinessAdministration)Mentor: Jerry Dodson, Founder andPresident, Parnassus Investments

Dodson became chief operating offi-cer at Parnassus, which manages $1.3billion in assets, in 2002. He currently

oversees business operations, primarilymarketing, and has worked in variousareas of the firm, including investmentresearch, shareholder services, technol-ogy and compliance. Prior toParnassus, he was an associate at theventure capital group of AdventInternational, a private equity firm thathe joined in 2001. There, he coveredthe software and communication sec-tors, identifying early-stage companiesfor venture investment. Prior to Advent,he was an analyst at Morgan Stanleyfrom July 1999 to August 2001, coveringcommunication service providers.

Dodson chose the profession because ofhis father, Jerry, who he also credits asbeing his best boss. “My father foundedParnassus in the basement of a house,”he said. “You can argue the professionchose me.” In 10 years, he sees himselftaking a broader leadership role atParnassus, such as becoming the chiefinvestment officer, and growing the firm.

Dodson said, in the future, he sees prod-uct evolution and ‘rationalization’instead of proliferation. For example, henoted that loads are becoming a small-er part of the business and there aremore funds without 12b-1 fees, whichhave been increasingly scrutinized byfirms and investors. Advisors and investorsare getting smarter so that will fuel theshift in thinking, he added.

What is most rewarding about themutual fund business is that it is “a greatway to enhance the financial health ofthe average, everyday American,”Dodson said, adding that helpinginvestors in an honest way is important.He points to Google, which was found-ed in 1998 and went public in 2004, as acompany he admires for being able toaccomplish a great deal in a short timeand in an ethical way.

Dodson serves on the National AdvisoryCouncil of the University of California atBerkeley’s Institute of Governmental

Studies. He also is a member of FullCircle Fund, a San Francisco Bay Areaphilanthropy group that works withschools and education groups onimproving public education. In 2006, hewas selected as a delegate by theoffice of Rep. Nancy Pelosi (D-Calif.) tothe quadrennial National Summit onRetirement Savings.

7.ANDREW FELTUSPortfolio ManagerPioneer Investments, BostonAge: 38Education: Tufts University (B.A. inQuantitative Economics andPhilosophy) Mentors: Daniel Fuss, PortfolioManager, Loomis, Sayles & Co.;Kenneth Taubes, Head of FixedIncome, Pioneer Investments

Feltus joined Pioneer Investments in 1994as a fixed-income analyst and becameportfolio manager in 2001. He has man-aged the Pioneer Global High Yield Fundsince then, the Pioneer High Income Trustsince March 2005 and the Pioneer HighYield Fund since April 2007. He also is amember of the team that manages thePioneer Strategic Income Fund andmanages separately managed institu-tional accounts. Before joining Pioneer,he was an assistant bond trader at MFSInvestment Management.

Feltus said his biggest challenge wasbuilding Pioneer’s Global High YieldFund from the bottom up. Hedescribed the fund as a foundation forthe firm’s high yield business, addingthat about $9 billion of the firm’s $300billion in assets under management isdedicated to high yield. With thatfund, Pioneer went from being aBoston firm to a global investmentcompany, he noted.

Running the funds on a day-to-daybasis and aiming towards consistentperformance is an ongoing challenge,

6.STEPHEN DODSON



Feltus said. He credits Taubes as beinghis best boss for giving him the space hehas needed. “He’s always given meenough rope to hang myself,” he said.“That kind of freedom is important.”

Feltus, a chartered financial analystwho has appeared on Bloomberg TVand on CNBC, said the company headmires most is investment manage-ment firm Loomis, Sayles & Co. becauseof Fuss’ approach there. “He’s alwaysstayed true to investment philosophy,”he added. “I think he’s closest to whatwe’re trying to do.”

Feltus predicted that, in 10 years, thefund industry will become more seg-mented in how various portions playout. “You’re seeing it break down intolittle pieces,” he said. For example,costs will go down on the index side asinvestors gain more expertise and per-formance will be a focus on the alphaside, he explained, adding that alpha iswhere he wants to be in a decade.

8.TIMOTHY FIDLERPortfolio ManagerAriel Capital Management, ChicagoAge: 37Education: Northwestern University(B.A. in Economics); University ofChicago (M.B.A.)Mentors: John Rogers, Founder andChief Investment Officer, ArielCapital Management; ChristianStadlinger, Director of ValueStrategies, Columbia Management

Fidler manages Ariel’s large-cap institu-tional portfolios and the Ariel FocusFund, in addition to serving on the firm’sInvestment Committee. He joined thefirm in 1999 as an assistant portfolio man-ager and became director of researchin 2002. Prior to that, from 1992 to 1996,he was a research analyst and portfoliomanager for Morgan Stanley’s U.S. valuemanagement teams. He is a chartered

financial analyst and a member of theFinancial Academy Advisory Board toChicago’s public schools.

At Ariel, Fidler specializes in the industri-al, retail and services industries. “Alongwith my partner - Charlie Bobrinskoy,who is Ariel’s vice chairman - wedesigned and launched the firm’s firstproduct addressing a space outside ofour historical small-cap focus,” he said.“We now have approximately $700 mil-lion in assets.”

Fidler pointed to Rogers as havinginspired him the most. “John has hadan enormous impact on my thinking asan analyst, a portfolio manager and aperson,” he said. “He is a remarkablycreative and independent thinker. Asa practicing contrarian investor, youneed a culture and a discipline thatrewards thinking differently from thecrowd. John has built a process, philos-ophy and company that nurtures andrewards seeing what others do not seeand acting with conviction when youare alone in your views.”

Fidler said he intends to remain withAriel over the next decade and contin-ue to grow the firm, but he feels theindustry needs to change. “The mutualfund industry will continue evolvingalong its current path, but I’m not con-vinced that it is the best direction forretail investors,” he said.“Concentrated, alpha-generatingproducts are increasingly pointingtoward the high-net-worth and institu-tional markets, while funds aimed at theindividual retail investor are increasinglybecoming quasi-indexed, asset-gather-ing vehicles for the fund companies.”

Fidler got into the industry after taking ayear off from studies toward a Ph.D. ineconomics and going to work for aportfolio manager he met throughNorthwestern’s economics departmentchair. “I became quickly…enthralled,”Fidler said. “I was struck by the impor-tance of behavioral psychology andhow much emotional control is requiredto be a successful investor.” Hedescribed his biggest accomplishmentas becoming only the third portfoliomanager in Ariel’s history.

The company Fidler admires most isBerkshire Hathaway. “It is an extraordi-narily unique company that embodieseverything we look for in a business:superior management, pristine balancesheet, rigorous and disciplined capitalallocation, an opportunistic posture,rational growth and sustainable com-petitive advantages,” he said.

9.CORY GILCHRISTPortfolio ManagerMarsico Capital Management,DenverAge: 37Education: University of Iowa (B.B.A.,M.B.A.)Mentor: Thomas Marsico, Founder,CEO and Chief Investment Officer,Marsico Capital Management

Gilchrist is portfolio manager for theMarsico 21st Century Fund and a co-manager of the Marsico Global Fund,

8 .TIMOTHYFIDLER



overseeing $16 billion of the firm’s $106billion in assets under management. Inaddition, he co-created the globalgeneralist research function, which hesaid differentiates the firm from itspeers. “Being part of that is my greatestaccomplishment,” he added.

In July 2007, Gilchrist and Thomas Marsicotook over and re-shaped the GartmoreU.S. Opportunities Fund, changing its stockholdings to target those stable valuestocks that could be subject to lifecyclechanges as part of the firm’s core growthinvestment strategy, which aims towardsdiversity. According to Gartmore, thefund has outperformed its benchmark

index and sector average for the threemonths ending October 31.

Prior to joining Marsico Capital in May2000, Gilchrist spent four years as an inter-national portfolio manager and analyst atInvista Capital Management, a memberof The Principal Financial Group, where heserved on a committee that managedseveral international equity funds. He is achartered financial analyst who first gotinto investing as a teenager, when his par-ents gave him $10,000 to invest toward adown payment on a house.

In 10 years, Gilchrist intends to be where heis now, running the same portfolios. Hepointed to Thomas Marsico’s culturalintegrity as the reason why he considershim his best boss. “He has been a fantasticinfluence, but I wouldn’t call him a boss,”he said. “I consider him to be a partner.”

Gilchrist said the companies he mostadmires have high integrity, pay themost attention to risk-adjusted returnsfor shareholders and make consumers’lives better and more efficient. “That’sthe type of company that we try toinvest with,” he added.

10.MANIND GOVILPortfolio ManagerRS Investments, New YorkAge: 35Education: University of Bombay(BCom); University of Cincinnati(M.B.A.)Mentors: Warren Buffett, Chairmanand CEO, Berkshire Hathaway; PeterLynch, Former Vice Chairman, FidelityManagement & Research; BrianTopping, Retired Vice Chairman,Mercantile Bankshares; Rudolph Riad-Younes, Head of International Equities,Julius Baer Investment Management

Govil joined RS Investments in October2006 in connection with Guardian InvestorServices’ acquisition of an interest in thefirm. Prior to that, he served as the head ofequity investments at Guardian Life,where he managed its Core Equity Fundsince August 2005. “The accomplishmentI am most proud of is the fact that everyone of our team members has addedalpha since we came together,” he said.

Since Govil took over the Core EquityFund, it went from being a losing fund toone that beats the S&P500. He credits theimprovements to being able to recognizewhich investments are steady and solidand also to an internal strategy of cross-pollination to improve performance

among the funds. “The challenge wasbasically getting quantitative and funda-mental themes to work in unison to deliverperformance,” he said, noting that amember of the firm’s quantitativeresearch team, which would look atinvestments from a numbers point of view,would spend two to three months with amember of the fundamental researchteam, which relied on research based oninput from companies, competitors, cus-tomers and suppliers.

From 2001 to August 2005, Govil was leadportfolio manager for large-capblend/core equities, as well as co-head ofequities and head of equity research atMercantile Capital Advisors. Prior to 2001,he was lead portfolio manager for coreequity at Mercantile. A chartered finan-cial analyst, he calls Mercantile’s Toppinghis best boss. “He played an integral rolein shaping my formative years in theinvestment business,” he said.

Among companies, Govil most admiresBerkshire Hathaway and how Buffett hasrun it. He said its management has highethical standards exemplified by howdirect its annual reports are in explainingstrengths and weaknesses. “They try totreat you not just like a stockholder, but likea partner,” he added.

In 10 years, Govil plans to be where he isnow. “I hope to be managing the RS CoreEquity Fund,” he said. “I hope to be meet-ing people who say they’re glad to beinvesting.” Going forward, he believesthere will be less of an emphasis on styleboxes in the fund industry and more onbeing able to generate performanceoutside of them.

9 .CORYGILCHRIST

“THE CHALLENGE WASBASICALLY GETTINGQUANTITATIVE ANDFUNDAMENTALTHEMES TO WORK INUNISON TO DELIVERPERFORMANCE.”

—MANIND GOVIL



11.CAREY FORAN HOCHSenior Vice President and Head ofMarketing John Hancock Funds, BostonAge: 38Education: College of Wooster (B.A.in history); Simmons School ofManagement (M.B.A.) Mentor: Margo Sammons, RetiredVice President of Operations, JohnHancock Life Insurance

Hoch oversees marketing for all ofJohn Hancock’s mutual fund prod-ucts and value-added materials. Shejoined Manulife Financial in 2001,before its 2003 merger with JohnHancock, and served as vice presi-dent of marketing and products forthe firm’s U.S. wealth managementdivision. In 2002, she spearheadedManulife’s push into interactive mar-keting, including the development ofa Web site for the firm’s managed

account program. In 2001, she ledthe launch of the firm’s 529 collegesavings program.

Prior to joining Manulife, Hoch wasvice president of product manage-ment for variable annuities at PutnamInvestments. Prior to Putnam, sheworked at Keyport Life Insurance, aswell as Fidelity and Guaranty LifeInsurance, in the product, marketingand operations areas with a focus onfixed income and variable annuities.

Hoch described her greatest accom-plishment as leading the re-launch ofJohn Hancock’s Web site. That nearlyyear-long project, which culminatedin June 2006, has received industryhonors from organizations such as theMutual Fund Education Alliance. “Wehave seen tremendous success,” shesaid, adding that a good Web site isall about interfacing and being ableto communicate.

Indeed, John Hancock’s new siteincludes single-click access to infor-mation such as performance andallows investors to create fund-track-ing lists. “If you have a millisecond ofsomeone’s attention, you have toknow how to engage them,” Hochsaid. “Communication toucheseveryone.” She noted that the indus-try will face increasing pressures tomake various platforms work, andgood e-commerce will be an impor-tant factor.

Hoch credits Matthew Shipman, nowa consultant, for bringing her toManulife and said he was her bestboss. “He felt very passionate aboutmarketing,” she said, noting that shedid not specifically set out to be amarketer. “But if I didn’t like it, Iwouldn’t be doing it.”

Hoch said she enjoys the businessand hopes to stay involved. “I’m hop-ing that in the next five to 10 years, I’llcontinue to leverage my talent andhelp different people,” she said,adding that she most admires JohnHancock as a company. “There’sreally no other company that I wouldgo work for right now.”

12.JUSTIN LANNENPortfolio Manager Macquarie Infrastructure Securities,New YorkAge: 33Education: University of Melbourne(BCom in Economics and Finance,Bachelor of Engineering - Chemical)Mentors: John Fitch, PortfolioManager, Macquarie InfrastructureSecurities; Greg Perry, Co-Founder,QED Capital

As portfolio manager for Macquarie’sglobal-listed infrastructure equitiesfunds and its North American andEuropean funds, Lannen oversees $1.4billion of the firm’s $3.9 billion in assetsunder management. He joinedMacquarie in March 2007 from ColonialFirst Estate, where he was a portfoliomanager for the Colonial First EstateIndustrial Share Fund in Sydney.

At Colonial, Lannen was a senior ana-lyst covering the infrastructure andequities sectors for six years beforebecoming portfolio manager in July2006. From 1998 to 2000, he was aninvestment analyst for Colonial FirstEstate in Wellington, New Zealand. Hejoined the firm in 1997 as a Japanese

“IN MY EXPERIENCE,WHEN A STOCK ISUNDERPERFORMINGOR A FUND IS UNDER-PERFORMING, THECHALLENGE IS TOREALLY UNDERSTANDWHY.”

—JUSTIN LANNEN

11 .CAREYFORAN HOCH



equities analyst. In 1998, while a com-petitor analyst for Colonial GroupStrategic Development in Melbourne,he assisted in the project managementaspect of the firm’s AUD$892 millionacquisition of Legal and General.

Lannen, who began his career as achemical engineer working at Orica, anadhesives and resins company, said thebiggest challenge in money manage-ment is the managing aspect. “In myexperience, when a stock is underper-

forming or a fund is underperforming, thechallenge is to really understand why,”he said, adding that a manager needsto know when selling out of a position isthe best option. He described his biggestaccomplishment as becoming a portfo-lio manager and said, in 10 years time,he still wants to be managing moneybecause he gets “excited on the way towork each morning.”

Lannen, who is a certified financialanalyst, is reluctant to say he admiresany one company most, but he point-ed to one investment in the firm’s port-folio that he likes, which is global soft-ware company Cintra. “I’m always verywary of admiring a company becausethat means I’m emotionally involved,”he said. However, he noted that Cintrahas a growing portfolio of assets, whichis what he seeks as a portfolio manager.

13.ZACH LIGGETTPortfolio Manager Financial & Investment ManagementGroup, Traverse City, Mich. Age: 33Education: Eckerd College (B.A. inEconomics/East Asian Studies);University of South Carolina (Mastersof International Business Studies)Mentors: Fiachra Mac Cana, Head ofResearch, VinaCapital; PaulSutherland, Founder and ChiefInvestment Officer, Financial &Investment Management Group;Martin Whitman, Founder and Co-Chief Investment Officer, ThirdAvenue Funds

Liggett co-manages the Utopia GrowthFund, Utopia Core Fund, Utopia CoreConservative Fund and Utopia YieldIncome Fund at Financial & InvestmentManagement (FIM) Group, which has$755 million in assets under manage-ment. “I have spent significant time andeffort at FIM Group to address theindustry challenge of insufficient attrac-

13 .ZACH LIGGETT



tively priced absolute return invest-ment strategies for non-accreditedinvestors,” said Liggett, who joined thefirm in 2003 as a portfolio manager.“Smaller investors are still stuck with anover-supply of product aiming to beator match a benchmark that usuallyhas little to do with their long-terminvestment goals. The Utopia family ofmutual funds that our team launchedin late 2005 brings our global absolutereturn investment style to the masses.”

Liggett envisions his firm and the U.S.fund industry becoming more global.“Perhaps in 10 years I will be splitting timebetween our beautiful office here innorthern Michigan and other officesspread across the world,” he said. “Withso many funds and much of our industrybecoming increasingly commoditized, itseems that further industry consolidationfrom here is a no-brainer.”

Liggett describes his biggest accom-plishment as “transitioning from a sin-gle-country, single-sector sell-side ana-lyst role to a go-anywhere investmentmanager.” Prior to FIM Group, he spentthree years as an equity research ana-lyst at West LB Panmure SecuritiesPacific in Tokyo. He joined West LB in1998 as an equity research assistantafter a year of teaching English for theCity of Takamatsu, Japan.

Liggett, who is a chartered financialanalyst, cited Mac Cana, with whomhe worked at West LB, as having beenhis best boss. “Mac Cana had theleadership and diplomatic skills need-ed to bring out the best in his analystsand manage the sometimes trickyrelationship between research andsales,” he said.

Nintendo is a company Liggett hascome to admire over the years.“When I covered the company as asell-side analyst, I was always intriguedby the paradox between an incredi-bly conservative corporate and finan-cial management team and a mas-sively innovative and creativeresearch and development team,” hesaid. “Nintendo seems to have mas-tered the right balance betweenholding firm to its long-term corporate

mission of staying financially conserva-tive and the continued developmentof innovative, industry-changing,must-buy products.”

14.JEREMY MAYManaging Director, Operations andClient ServiceALPS Fund Services, DenverAge: 37Education: University of Colorado(B.S. in Accounting)Mentor: Bob Alexander, RetiredFounder, ALPS Fund Services

May joined ALPS in 1995 and is responsi-ble for overall operations and relation-ship management for the fund adminis-tration unit of Denver-based ALPSAdvisers, which has $1.5 billion in assetsunder management. He also serves astreasurer for several ALPS-sponsoredproducts, including the Liberty All-StarFunds, the Clough Global Funds andthe Reaves Utility Income Fund. Prior tojoining ALPS, he worked at Deloitte &Touche as a certified public account-ant, primarily working with the financialservices industry.

May began his career at ALPS as a con-troller in the administration departmentand worked his way to becoming headof the administration department andthen one of the owners of the compa-ny with responsibility for the overalloperations at ALPS. “My biggest profes-sional accomplishment would be themanagement success I have had atALPS, which has resulted in almost noturnover at the director-level in the lastfive years,” he said. “It is very challeng-ing to direct a diverse group of leaders,including our general counsel, chiefcompliance officer, chief technologyofficer and v.p. of fund accounting.”He sees himself having a similar leader-ship role at ALPS in 10 years.

The story for the fund industry will becontinued innovation in products, May

said, adding that he foresees growth inthe annuities space and a shift towardsguaranteed income. May has been aspeaker at conferences held by variousorganizations, including the NationalInvestment Company ServicesAssociation, and chairs the audit com-mittee of the University of ColoradoFoundation, which in October wasnamed Large Foundation of the Yearby Foundation & Endowment MoneyManagement for excelling in returnsand limiting its downside.

15.JEFFREY MILLERPresident American Independence CapitalManagement, New YorkAge: 36Education: Cornell University (B.A. inHistory, M.B.A.) Mentors: David Berry, FormerResearch Director, Keefe Bruyette &Woods; Phil Cuthbretson, Trader,American Independence CapitalManagement

14 .JEREMY

MAY



In 2007, Miller became president ofAmerican Independence CapitalManagement (AICM), a sub-advisor tothe American Independence StockFund and the Financial Services Fund,both of which he oversees. Each hasbeen outperforming its benchmarkand, in the case of the FinancialServices Fund, is among the top fundsin its sector in the U.S. Last year, hehelped to form AICM, a subsidiary ofAmerican Independence FinancialServices, after serving as co-chiefinvestment officer of Miller & JacobsCapital, a firm he co-founded in 1997.

AICM has $112 million in assets undermanagement. “My biggest accom-plishment is re-directing the firm,” Millersaid, adding that he emphasizes valueinvesting. He said he really enjoys man-aging the value fund because he getsto constantly learn about new compa-nies. “In 10 years, I see myself still man-aging those funds,” he added. “I don’tsee myself doing anything different.”

The company Miller admires, in terms ofhigh returns on capital, is Lazard Freres,but a good model to emulate overall isFidelity Investments’ Magellan Fundunder Peter Lynch. Miller said, in thenext decade, he sees the industryfocusing on retirement wealth building.He does not, however, see it consolidat-ing into five or six jumbo firms becausethe best performance will still be drivenby some of the smaller firms, he noted,adding that firms such as OaktreeCapital Management offer “excellentvalue to investors.”

Miller got into the mutual fund busi-ness because he liked followingstocks, using money he madethrough summer jobs to make his firstinvestments. He said Berry, who losthis life on 9/11, was his best boss. “Hewas a good role model, was extreme-ly smart and really taught me how tofocus on the details,” he added.

16.SANDY RUFENACHTChief Investment Officer andPrincipal OwnerThree Peaks Capital Management,Greenwood Village, Colo.Age: 42Education: University of NorthernColorado (B.B.A.)Mentors: Thomas Bailey, Founder,Janus Capital Group; Jim Craig,Former Chief Investment Officer andDirector of Research, Janus CapitalGroup; Thomas Marsico, Founder,CEO and Chief Investment Officer,Marsico Capital Management

Prior to founding Three Peaks in 2003,Rufenacht managed or co-man-aged multiple fixed-income prod-ucts at Denver-based Janus Capitalfor more than 10 years. Prior to histime at Janus, he spent two years atColonial Investments in Boston as afund accounting supervisor.

From 1990 to 1991, Rufenacht was asenior fund accountant for the JanusFlexible Income Fund and the JanusTwenty Fund. In 1991, he moved onto become a fixed-incometrader/analyst for four years beforebeing named an assistant portfoliomanager for Janus Flexible IncomeFund in 1995. In 1996, he becameassistant portfolio manager of theJanus High-Yield Fund and beganmanaging the Janus IntermediateGovernment Securities and JanusShort-Term Bond funds. In June of1996, he became co-manager of

the flexible income and high-yieldfunds and was later named portfoliomanager and executive v.p. of thelatter fund. In 1998, he launchedand managed the Janus WorldHigh-Yield Fund.

Rufenacht said he became interest-ed in the stock market while in col-lege and described his biggestaccomplishment as being named aportfolio manager by Thomas Bailey.“Every day you have challenges as aportfolio manager,” he said. “You’rebeing paid to manage the fund andto manage it wisely.” Rufenacht,however, credits his father, SandyRufenacht, Sr., with being his bestboss because he was tough on himwhile raising him. “I’d still like to thinkthat he is my boss,” he added.

Over the next decade, Rufenachtsaid he “can’t see doing any jobother than being a portfolio manag-er of a high-yield product.” Hebelieves that is the direction theindustry is shifting, in part due to reg-ulatory pressures. “The high yieldmarket will become a bigger marketthan it is today,” he added. “From aregulatory perspective, it’s easier toissue high-yield bonds.”

“[DAVID BERRY] WAS AGOOD ROLE MODEL,WAS EXTREMELY SMARTAND REALLY TAUGHTME HOW TO FOCUSON THE DETAILS.”

—JEFFREY MILLER

16 .SANDY

RUFENACHT



17.MONEM SALAMDirector of Islamic Investing andDeputy Portfolio ManagerSaturna Capital, Bellingham, Wash.Age: 35Education: University of Texas atAustin (B.A. in Economics andGovernment); University of Texas atDallas (M.B.A.) Mentors: Nicholas Kaiser, PortfolioManager, Saturna Capital; Dr. YaqubMirza, Chief Executive Officer,Sterling Management

Salam was chief investment officer for

ITG & Associates from 1998 until 1999 anda registered representative with MorganStanley before joining Saturna Capital inJune 2003. At Saturna, his biggest chal-lenge has been getting across the mes-sage about Islamic investing. “The chal-lenge that we overcame was specific tothe funds we manage,” he said, notingthat the Amana Growth and Incomefunds employ a socially responsible invest-ing strategy and give Muslims an idea ofhow to save according to their beliefs.

In meeting the challenge, Salam andother representatives from Saturna visit-ed 400 Islamic centers in the U.S. toeducate them as to what Islamic invest-ing really means and why it is important.As a result of those visits, the fund thatSalam oversees has grown from $34 mil-lion to $1 billion in assets and the num-ber of shareholders has grown fromabout 9,000 to more than 50,000.

According to Salam, he chose the pro-fession because investing is important inpeople’s lives. “In 10 years, I see myselfas a portfolio manager and ideally run-ning an investment firm in this samearea,” he said. “Meanwhile, I see theindustry at a point where the compa-nies themselves are more sociallyresponsible, allowing them to attractsocially responsible investors.”

Salam said Saturna is the company hemost admires and that Kaiser is his bestboss. “They really are very conscious ofwhat’s right for the client,” he said, citingas an example the firm’s practice ofreducing fees, even if costs are increasing.

Salam is chairman of PeacefulCommunications, a non-profit organi-zation currently working on a docu-mentary about Muslims in America, andhas spoken at and chaired severalIslamic finance and investment confer-ences worldwide.

18.CHARLES STEWARTTODDVice President, Financial ReportingJPMorgan, BostonAge: 36Education: University of NewHampshire (B.S. in BusinessAdministration)Mentor: Frank Seyboth, Tax Director,The Baupost Group

Todd, who joined JPMorgan in 2000 asan assistant v.p. for financial reporting,leads a team of 35 financial reportingofficers, managing client relationshipsacross more than 300 funds. Prior toJPMorgan, he was a senior fundadministrator and later manager offund administration at State Streetfrom May 1998 to June 2000. From1996 to 1998, he was a fund account-ant and investment administrator atForum Financial Group.

17.MONEMSALAM



At JPMorgan, Todd led a due diligenceanalysis that resulted in the implementationof a new software platform to improvefinancial reporting. “From a control per-spective, reporting due diligence wasn’t astight as it needed to be,” he said, addingthat the firm uses the platform, fromConfluence Technologies, to do its annualand semi-annual reports and Securitiesand Exchange Commission filings.

Todd plans to do more in the fund indus-try going forward. “In 10 years, I seemyself as an assistant treasurer or treasur-er at a fund complex,” he said, notingthat he enjoys working on the financialreporting side and managing the tech-nology aspect. “You have to have anunderstanding of what those serviceproviders are doing for you,” he added,crediting Seyboth as teaching him howto be a good technology manager.

Like the major changes that occurred withfinancial reporting following the Sarbanes-Oxley Act, Todd sees regulation playing abigger hand in the industry, particularly inhow funds invest. “I see a less is moreapproach,” he said. As a result of ‘regula-tory fatigue,’ the SEC may back off some-what when it comes to rule-making or atleast look more closely at how morerequirements impact shareholders, he pre-dicted, adding that the emphasis will con-tinue toward more meaningful and moreconsistent disclosure.

19.ALEJANDROVALLECILLOSenior Equity Portfolio ManagerAllegiant Asset Management,ClevelandAge: 39Education: George Mason University(B.A.); University of Michigan (M.B.A.) Mentors: Warren Buffett, Chairmanand CEO, Berkshire Hathaway;Donald Ross, Former ChiefInvestment Officer, Allegiant AssetManagement

Vallecillo is a senior equity portfoliomanager at Allegiant AssetManagement and oversees theAllegiant Mid-Cap Value Fund, whichhas assets of about $400 million. Thefund has grown from $50 million whenhe and his partner, Michael Santelli,first took it over after joining the firm in1996 and has been beating itsbenchmark while other mid-capvalue funds struggle. Indeed, the twomanagers were the subject of aBarron’s feature article highlightingtheir ability to find ‘value in thewreckage’ of the 2007 mortgagemeltdown. Prior to joining Allegiant,Vallecillo was a corporate bond andstructured fixed-income trader withMerrill Lynch.

Vallecillo, a chartered financial ana-lyst, said the challenge for him is exe-

cuting the investment process, inwhich he incorporates four elements.The first is a quantitative ranking tosort out stocks that he and Santellifeel are most stable in terms of valua-tion. Second is an analysis of compa-nies that score highly with returns.Next is managing risk by keeping theportfolio diversified. Finally, there is a‘sell discipline’ of reviewing how achange in a company’s fundamen-tals may impact its stock.

Vallecillo said he is most proud of howthe fund’s assets under managementhave grown and wants to continuegrowing the company going forward.For the industry, he sees a greateremphasis on risk-adjusted returns,which he believes will be needed tosustain growth. In addition, firms willneed to go against conventional wis-

19.ALEJANDROVALLECILLO


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dom at times, he said. That is a trait ofthe company he most admires and alsoa stock in the fund’s portfolio,Progressive Insurance. He noted thatthe company has deliberately imple-mented a practice of having lowerrates of returns to drive down margins,which has resulted in growth.

Vallecillo calls Ross his best boss, credit-ing him with executing an investmentprocess for the portfolio. “He gave meopportunities to learn a lot about thebusiness,” he said.

20.JASON WEINERVice President and PortfolioManagerFidelity Investments, BostonAge: 38Education: Swarthmore College (B.A.in Political Science)Mentors: Arieh Coll, PortfolioManager, Eaton Vance; Will Danoff,Portfolio Manager, Fidelity Investments

Weiner is the manager for the FidelityGrowth Discovery Fund, Advisor EquityGrowth Fund and the VIP: GrowthPortfolio, overseeing a combined $16 bil-lion in assets. He began his career in mutu-al funds in Fidelity’s equity researchdepartment in 1991 and, throughout hiscareer, has followed the retail, technology,air transportation, business services,biotechnology, retail office products, per-sonal computers and computer worksta-tion industries.

Weiner managed the Fidelity Select AirTransportation Portfolio from 1994 to 1996,the Fidelity Select Computers Portfolio from1996 to 1997, the Fidelity Export andMultinational Fund from 1997 to 1998, theVIP Contrafund Portfolio in 1998, theFidelity Discovery Fund from 1998 to 2000and the Fidelity OTC Portfolio from 2000 to2003. He assumed responsibility for theAdvisor Equity Growth Fund and VIP:

Growth Portfolio in 2006 and was namedassociate portfolio manager for VIPContrafund Portfolio that year.

A chartered financial analyst, Weiner readabout Fidelity and Peter Lynch in college,which is how he became interested in theindustry. He said his biggest challenge is“getting into the heart of the matter” withmanaging a portfolio. “You’re presentedwith so much information,” he added.Making a calculation and choosing a rel-atively small number of investments alsoare challenges, but the most importantthing he does is bring value to investors.

Weiner’s best boss is the only boss he everhad—the Johnson family – which hecalled a “very good family to work for.” Healso credits his other mentors for inspiringhim. “The nice thing about Fidelity is thatthere are a lot of mentors,” he said.

Weiner believes the industry will remainstrong over the next decade, with thebigger companies still playing a keyrole. “The good companies that arestill around are still our biggest com-petitors,” he said. Weiner admires a lotof companies, but he pointed to Ciscoas one with a “fabulous track record”and to Berkshire Hathaway underWarren Buffet. i

“THE NICE THINGABOUT FIDELITY ISTHAT THERE ARE A LOT OF MENTORS.”

—JASON WEINER

20.JASONWEINER



1. Keith Hartstein President and CEOJohn Hancock Funds

James ShepherdsonPresidentAXA Distributors

2. Thomas Caldwell Founder and ChairmanCaldwell Financial

Michael Lee-ChinChairmanAIC Limited

David PictonPortfolio Manager Synergy Asset Management

3. Nola Maddox Falcone Former President, Co-CEO and Portfolio ManagerEvergreen Asset Management

Mark TravisChief Executive Officer Intrepid Capital Funds

4. Christopher BluntSenior Vice President and Chief Operating OfficerLife and Annuity Operations New York Life Insurance

5. Bruce Greenwald ProfessorColumbia University Business School

Laura SloateAdjunct ProfessorColumbia University Business School

6. Jerry DodsonFounder and PresidentParnassus Investments

7. Daniel FussPortfolio ManagerLoomis, Sayles & Co.

Kenneth TaubesHead of Fixed IncomePioneer Investments

8. John RogersFounder and Chief Investment OfficerAriel Capital Management

Christian StadlingerDirector of Value StrategiesColumbia Management

9. Thomas MarsicoFounder, CEO and Chief Investment OfficerMarsico Capital Management

10. Warren BuffettChairman and CEOBerkshire Hathaway

Peter LynchFormer Vice ChairmanFidelity Management & Research

Brian ToppingRetired Vice ChairmanMercantile Bankshares

Rudolph Riad-YounesHead of International EquitiesJulius Baer Investment Management

11. Margo SammonsRetired Vice President of OperationsJohn Hancock Life Insurance

12. John FitchPortfolio ManagerMacquarie Infrastructure Securities

Greg PerryCo-FounderQED Capital

13. Fiachra Mac CanaHead of ResearchVinaCapital

Paul SutherlandFounder and Chief Investment OfficerFinancial & Investment Management Group

Martin WhitmanFounder and Co-Chief Investment OfficerThird Avenue Funds

14. Bob AlexanderRetired FounderALPS Fund Services

15. David BerryFormer Research DirectorKeefe Bruyette & Woods

Phil CuthbretsonTraderAmerican Independence Capital Management

16. Thomas BaileyFounderJanus Capital Group

Jim CraigFormer Chief Investment Officerand Director of ResearchJanus Capital Group

Thomas MarsicoFounder, CEO and Chief Investment OfficerMarsico Capital Management

17. Nicholas KaiserPortfolio ManagerSaturna Capital

Dr. Yaqub MirzaChief Executive Officer Sterling Management

18. Frank SeybothTax DirectorThe Baupost Group

19. Warren BuffettChairman and CEOBerkshire Hathaway

Donald RossFormer Chief Investment OfficerAllegiant Asset Management

20. Arieh CollPortfolio ManagerEaton Vance

Will DanoffPortfolio ManagerFidelity Investments

MENTORS’ PAGEThe following mentors were singled out for their impeccable example, which inspired, challenged and cultivated theskills and character necessary to give rise to this year’s group of Rising Stars.

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