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MONEY MANAGER MONITOR
FOR THE WEEK ENDED MAY 18, 2001 ----------------------------------------------------------- THIS WEEK: ***NOTABLE CONTACT MOVEMENTS ***MERGERS & ACQUISITIONS ***NEWS ***13F: IRRECONCILABLE DIFFERECES: BOWMAN AND PEQUOT FACE BREAKUPS ***13F: ORIGIN CAPITAL MAINTAINS DEVOTION TO HEALTH CARE ***13F: GALLEON FAVORS BIOTECH, COMPUTERS ***SECTOR COVERAGE: ALLIANCE CAPITAL MANAGEMENT L.P. ----------------------------------------------------------- NOTABLE CONTACT MOVEMENTS U.S.: *CAROL ANN BAKER, formerly an assistant portfolio manager with Bear Stearns Asset Management, Inc., left the firm at the end of April. *THOMAS BARRETT, formerly a portfolio manager with MFS Investment Management, recently joined Sirios Capital Management as a portfolio manager. Barrett joins former MFS colleagues Christian Felipe and John Brennan. During his tenure at MFS, Barrett co-managed the Massachusetts Investors Growth Stock Fund and Fortis Series Fund- Investors Growth Series. *TONY FIORINO recently joined Citigroup Global Asset Management in Stamford, CT as a security analyst. Prior to joining the firm, Fiorino was a sell-side equity analyst covering pharmaceuticals at J.P. Morgan Securities Inc. *The global equity research department at Boston-based Putnam Investment Management, Ltd. experienced three analyst departures recently. Security analyst MICHAEL FLEMING formerly followed the paper & forest products, oil services and railroads sector. Picking up coverage of oil services is Jim Falvey. JENNIFER MURPHY previously followed telecom equipment. The telecom equipment coverage was split up between John Boselli, who covers wireline equipment, and Joseph Hosler, who covers wireless equipment. VINCENT VLIEBERGH previously followed chemicals and global oil. There is no replacement on these sectors as of yet. *EDMOND GRIFFIN recently joined State Street Research & Management as an analyst/generalist on the small-cap team. Prior to joining State Street, Griffin was employed by an investment bank. *JAMES J. HENSEL, formerly the director of research at Old Kent Bank & Trust Company, left the firm approximately three weeks ago. *ELLEN HUANG, formerly a portfolio manager with New York-based Train Smith Counsel, recently left the firm. *THEODORE H. JARVIS, formerly a senior vice president and portfolio manger at Muncie, IN-based American National Trust & Investment Management, left the firm in March 2001. Terri Matchett has taken over his position and responsibilities. *CHIAN JIANG is expected to join Westfield Capital Management in July as an analyst covering life sciences and biotechnology. *RICHARD LANE and GLENN PRIMACK, formerly portfolio managers with Milwaukee, WI-based Fiduciary Management, Inc. and co-portfolio managers on the FMI Focus Fund, have launched their own venture. Originally the firm expected to operate as Lane Primack Asset Management, however, has instead taken on the name Broadview Advisors. The firm began operating in the beginning of May and currently operates from Fiduciary Management's offices, but is expected to move to a new location in the next few months. Broadview has also recruited JEFFREY NETOLS, formerly a portfolio manager with Putnam Investment Management, and RICHARD WHITINGS, a former trader with Cleary Gull Reiland McDevitt Inc. and Vector Securities Inc. Prior to Netols' departure from Putnam Investment Management, Inc., he managed the Putnam Small Cap Value Fund and the Putnam VT Small Cap. *SHEEL PATEL recently joined Greenville, DE-based Kalmar Investments as a research associate. Previously, Patel served as a security analyst following capital goods, energy, banking, healthcare, technology, basic materials, and consumer services for Affinity Wealth Management (formerly COMPU-VAL Investments, Inc.) until March 2001. *KATHERINE SCHAPIRO, CFA, and STACEY HO, CFA recently joined Strong Capital Management, Inc. as co-portfolio managers of the Strong Overseas Fund, Strong International Stock Fund, and Strong Foreign MajorMarkets(SM) Fund replacing David Lui who recently left the firm to pursue other interests. The duo was previously employed by Wells Capital Management, Inc., where they co-managed the Wells Fargo Core Trust International Equity Fund and the Wells Fargo International Equity Fund. Cynthia Tussan, who was recently promoted to a portfolio manager at Wells Capital, is now managing both funds. *JEFFREY JAMES SCHAPPE was recently named as a vice president and director of research at Portsmouth, NH-based Citizens Advisers, Inc. Previously, he served as senior vice president and director of equity research with George K. Baum & Co. *JAMES P. STOEFFEL, formerly a security analyst and vice president covering leisure staples and retail for Palisade Capital Management, L.L.C., left the firm in March 2001. *DAVID W. WHITTALL, formerly a senior security analyst covering global infrastructure, energy/electricity, transportation and capital goods at Montgomery Asset Management, L.P., left the firm in May 2001. Glenn Hilton who worked with Whittall on the Global Infrastructure team was promoted to the senior security analyst position. SELL-SIDE: *WILLIAM FOGEL joined First Union Securities' New York office in May 2001 as a senior equity analyst covering the alternative energy and power technology sector. Prior to joining First Union, Fogel was a vice president and senior equity analyst covering alternative energy and utility companies at FAC/Equities. *CYNTHIA HATSTADT, formerly a security analyst at Robertson Stephens & Co., left the firm approximately one month ago. *Prudential Securities Inc. announced that DANIEL HEMME has joined the firm as a senior equity analyst covering transportation and logistics. Prior to joining Prudential, Hemme was the first director of business development at the Airborne Freight Corporation for 11 years. *Dresdner Kleinwort Wasserstein announced the appointment of ROBERT J. HOEHN as the director of North American equity research. Hoehn will assume responsibility of the firm's equity research staff of over 30 senior analysts. Prior to joining Dresdner Kleinwort Wasserstein, Hoehn was the director of North American equity research at ING Barings, which was acquired by ABN AMRO, Inc. in 2001. Also joining Dresdner Kleinwort Wasserstein are senior analysts THOMAS WYMAN and WESLEY MAAT. Wyman recently joined Dresdner's San Francisco office as an equity analyst covering the media and entertainment sector. Previously, he was an equity analyst covering the Internet retail sector at J.P. Morgan Securities Inc. Maat joined Dresdner Kleinwort Wasserstein as a vice president and equity analyst covering the oil services sector. Previously, he was an equity analyst covering energy oil services and equipment at Deutsche Banc Alex. Brown. *RICHARD JACOBS, formerly a first vice president and security analyst covering a wide range of technology companies at Janney Montgomery Scott, L.L.C., left the firm on May 5, 2001. *MARK MORGAN left Putnam Lovell Securities Inc. in March 2001. Previously, Morgan was a vice president and a sell-side analyst covering e-finance and West Coast banking companies at Putnam Lovell Securities Inc. *JACKSON E. SPEARS, formerly an analyst covering business and computer information services with ABN AMRO, Inc., left the firm in February 2001. ----------------------------------------------------------- MERGERS & ACQUISITIONS *May 15, 2001- Bank of Montreal agreed to acquire Guardian Capital Group Ltd.'s fund business. Toronto-based Guardian Group of Funds will operate independently of Bank of Montreal's fund businesses, which include BMO Mutual Funds, Harris Insight Funds in the U.S., BMO Nesbitt Burns Funds, and Jones Heward Funds. Guardian Capital will continue to manage some of the funds. The deal is expected to be complete this summer. *May 14, 2001- SunTrust Banks agreed to acquire the institutional business of Robinson-Humphrey. The deal is expected to be complete at the end of the summer. Upon closing SunTrust Equitable Securities will be renamed SunTrust R-H Securities Inc. and the newly acquired business will be combined with SunTrust's existing equity capital markets and M&A divisions to become the Robinson-Humphrey Equity Capital Markets division of SunTrust R-H Securities Inc. This announcement came a day after SunTrust announced that it was bidding against First Union Corp. to acquire Wachovia Corp. ----------------------------------------------------------- NEWS *As a result of the merger between Milwaukee-based Firstar Corporation and Minneapolis-based U.S. Bancorp on February 27, 2001, the asset management divisions of the companies, which include Firstar Investment Research & Management Co., LLC, (FIRMCO) and First American Asset Management, have been consolidated under the U.S. Bancorp Piper Jaffray Asset Management, Inc. name. *The TD Asset Management 13F filing for the quarter ended March 31, 2001 now includes the assets of the Canada Trust Group of Companies, including the former CT Private Investment Council. TD acquired CT in February 2000 and subsequently the CT investment team and assets were combined with those of TD. *Following the recent break-up of Pequot Capital Management and technology guru Dan Benton, San Mateo, CA-based hedge fund Bowman Capital is rumored to be following suit. In an article in Barron's on Saturday May 12, 2001, it was announced the Bowman's two principals, Larry Bowman and John Hurley, might be going their separate ways. The firm manages the Spinnaker Technology Fund, L.P., the Spinnaker Offshore Fund, LTD, the Spinnaker Crossover Fund, the Spinnaker Founders Fund, and Offshore Founders Fund, LTD. As of December 31, 2001, Bowman managed approximately $4.2 billion in equity assets according to a 13F filed with the SEC. This was a significant decrease from the quarter before when the firm reported $9.8 billion in equity assets invested in approximately 170 companies. For the first quarter ended March 31, 2001, Bowman Capital reported ownership of 116 companies, valued at $3.0 billion. *Effective June 1, 2001, MFS Investment Management and Jennison Associates LLC will replace Nicholas-Applegate Capital Management, L.P. as sub-advisers for the Allmerica Trust- Select Aggressive Growth Fund, with $843.5 million in equity assets as of December 31, 2000. *The American Odyssey Funds have been renamed the CitiStreet Funds. The American Odyssey Core Equity Fund is now known as the CitiStreet Large Company Stock Fund; the American Odyssey Emerging Opportunities Fund is now the CitiStreet Small Company Stock Fund; and, the American Odyssey International Equity Fund is now the CitiStreet International Stock Fund. *Sources at Fidelity Management & Research have stated that there may have been a bug in the firm's reporting system that affected some filings. This may have caused some ownership declines to be overstated. For example, the reported position of AOL Time Warner was 100 shares when in fact the actual position was 113,814,663 shares. Fidelity restated its holdings in an amended 13F filing on May 16, 2001. ----------------------------------------------------------- 13F: IRRECONCILABLE DIFFERECES: BOWMAN AND PEQUOT FACE BREAKUPS Following the collapse of Long Term Capital Management, a number of the remaining billion-dollar hedge funds have continued to be troubled by poor investment returns and management shake-ups. With Julian Robertson and George Soros out of the picture, some of the smaller funds have continued to drop out of the running or morph their institutions. The recent months and days of 2001 have seen the breakup of Pequot Capital Management's ARTHUR SAMBERG and DANIEL BENTON and the reported breakup of Bowman Capital's LARRY BOWMAN and JOHN HURLEY. For the first quarter ended March 31, 2001, Bowman Capital reported ownership of 116 companies, valued at $3.0 billion, a sharp decline from the previous quarter, when the firm reported ownership of 132 companies, valued at $4.2 billion. One year ago, for the first quarter of 2000, Bowman reported ownership of 224 companies valued at $12.0 billion. Bowman first made a name for itself riding the cusp of the technology boom. The firm aggressively invested in technology while hedging its bets. One year ago, the firm's average portfolio P/E was neatly double the average P/E of the S&P 500. It has since fallen dramatically, to only slightly above the S&P. In an article in Barron's on Saturday May 12, 2001, it was reported that Bowman's two principals, Larry Bowman and John Hurley, would be going their separate ways. The firm has not responded. The breakup, it is widely believed, is a result of lagging performance in a difficult market. While the firm shorts and hedges against potential downturns, the firm's technology focus may have left it few places to hide. Bowman has also made notable efforts in recent years to expand its involvement in private equity and mezzanine financing. It even opened a new office in London to focus on European venture capital. During the dot.com boom, venture capital was an excellent way to get involved in high-tech companies on the ground floor. As the IPO market has shriveled up and technology stocks have fallen out of favor, Bowman has been left holding long positions in companies that benefited from an opening IPO pop, but that suffered following the downturn. One such example was fiber-optic communications equipment maker Oni Systems Corp. [ONIS]. Bowman was on the ground floor of the company, supplying it with private financing. Shortly after the firm's 2000 IPO, the stock reached an all time high of 142.0. On May 17, 2001, the company closed at 33.15. Bowman's top five new purchases for the quarter included: Lexmark International Inc. [LXK] with 1,000,000 shares (valued at $45.5. million); Compaq Computer Corp. [CPQ] with 2,220,000 shares (valued at $40.4 million); Mercury Interactive Corp. [MERQ] with 800,000 shares (valued at $33.5 million); Rambus Inc. Del [RMBS] with 1,600,000 shares (valued at $33.0 million); and, Apple Computer with 1,379,600 shares (valued at $30.4 million). Bowman's top five holdings for the first quarter included: Microsoft Corp. [MSFT] with 6,258,100 shares (valued at $342.2 million); EMC Corp MA [EMC] with 5,372,000 shares (valued at $157.9 million); Qualcomm Inc. [QCOM] with 2,746,240 shares (valued at $155.5 million); Oracle Corp. [ORCL] with 8,568,500 shares (valued at $128.4 million); and, Sonus Networks Inc. [SONS] with 6,400,000 shares (valued at $127.7 million). Arthur Samberg and Daniel Benton, the managers and founding partners of hedge fund giant Pequot Capital Management, are also ending their partnership, it was reported last month. Benton is reportedly leaving to run his own hedge fund, Andor Capital Management. Samberg will remain at Pequot and continue to manage the Westport, CT-based firm. The split, it has been reported, was not a result of poor performance, or souring market conditions; such conditions were responsible for the downfall of Soros Fund Management and Julian Robertson's Tiger Management. The split is reportedly a result of differing opinions and visions of Pequot's future. Benton, a technology specialist, wanted to continue to make large bets, long or short, on technology, while Samberg was interested in further diversification. The fund has also struggled under a growing asset base. In a letter to shareholders following the fourth quarter, the firm reported in excess of $15 billion in net assets under management. However, in its 13F, filed for the quarter ended December 31, 2000, the firm reported ownership of 493 companies, valued at $7.6 billion, a sharp decrease from the first quarter of 2000, when the firm reported ownership of 517 companies valued at $16.5 billion. For the first quarter ended March 31, 2001, the firm's reported equity asset declined again, to a reported ownership of 563 companies, valued at $6.4 billion. Pequot's top five new purchases included: Qwest Communications International Inc. [Q] with 5,608,900 shares (valued at $196.6 million); Electronic Arts [ERTS] with 3,617,100 shares (valued at $196.2 million); Philip Morris Cos Inc. [MO] with 2,300,000 shares (valued at $109.1 million); NTT DoCoMo Inc. with 6,065 shares (valued at $105.5 million); and, Invitrogen Corp. [IVGN] with 1,779,000 shares (valued at $97.6 million). Pequot's top five holdings included: Qwest Communications International Inc. [Q] with 5,608,900 shares (valued at $196.6 million); Electronic Arts [ERTS] with 3,617,100 shares (valued at $196.2 million); Pfizer Inc. [PFE] with 4,722,853 shares (valued at $193.4 million); Curagen Inc. [CRGN] with 6,450,500 shares (valued at $151.2 million); and, Incyte Genomics Inc. [INCY] with 9,343,700 shares (valued at $143.4 million). ---------------------------------------------------------------------------- ------------- 13F: ORIGIN CAPITAL MAINTAINS DEVOTION TO HEALTH CARE Founded in 2000, San Francisco-based hedge fund Origin Capital Management hit the ground running in its first year in operation. Launched at a time when the markets were on very shaky ground, the firm reported $620.9 million in equity assets for its first 13F filing for the quarter ended December 31, 2000. Walter "Buzz" Burlock, a former Soros Fund Management managing director, spearheaded this new venture to invest in both public and pre-IPO companies predominately in the health care sector. For the quarter ended March 31, 2001, the firm reported $428.3 million in equity assets invested in a portfolio of 96 companies, a decrease of approximately $200.0 million dollars from the prior quarter. Not surprisingly, health care and biotechnology were the most heavily weighted sectors in Origin's portfolio. Approximately, 52.4% of the portfolio was invested in biotech companies, followed by health care, which comprised 23.7% of the portfolio. Consumer staples was the next most heavily weighted sector, with 10.2% of the portfolio, giving it a slight edge over drugs/pharmaceuticals, which comprised 7.3% of the portfolio. Although the majority of the portfolio (50.2%) fell in the large-cap arena, there was a fairly large representation of mid- and small-cap companies, with 21.2% and 28.6%, respectively. New positions for the quarter included a 200,000 share position in Elan Plc-ADR [ELN]; a 200,000 share position in Alza Corp. [AZA] valued at $8.1 million; 150,000 shares of AstraZeneca Plc-ADR [AZN] valued at $7.2 million; 100,000 shares of Bristol Myers Squibb Co. [BMY] valued at $5.9 million; and, 80,800 shares of Teva Pharmaceutical Industries Ltd.- ADR [TEVA] with 80,800 shares valued at $4.4 million. Top five holdings for the quarter ended March 31, 2001, included: McKesson HBOC Inc. [MCK] with 1,218,600 shares valued at $32.6 million; Boston Scientific Corp. [BSX] with 1,607,000 shares valued at $32.4 million; Biogen Inc. [BGEN] with 510,000 shares valued at $32.3 million; Genentech Inc. [DNA] with 536,200 with $27.1 million; and, Quintiles Transnational Corp. [QTRN] with 807,450 shares valued at $15.2 million. ----------------------------------------------------------- 13F: GALLEON FAVORS BIOTECH, COMPUTERS For the first quarter ended March 31, 2001, Galleon Management L.P. reported ownership of 131 companies valued at $1.2 billion, a decline from the previous quarter when the firm reported ownership of 105 companies valued at $1.7 billion. It most recent filing is a notable decline from less than a year ago, when the firm reported ownership of 147 companies valued at over $2.7 billion. The high profile fund run by hedge fund guru Raj Rajaratnam is just one of several hedge funds that have seen their assets under management decrease amid a slumping technology market. Recent weeks and months have seen high profile splits in hedge funds such as Pequot Management Inc. and Bowman Capital Management, L.L.C. Top five micro sector weightings for the firm included biotechnology with 12.8%, computer hardware (10.9%), computer software (10.9%), health care (drugs/pharmaceuticals) (10.1%), and computers (networking) (9.0%). Some of the firm's expanded interest in the biotech and health care sectors may be a result of the recent addition of SAMUEL NAVARRO. Navarro, formerly a managing director and sell-side global head of Health Care Corporate Finance at ING Barings, recently joined the firm as an analyst and managing director of the Galleon Group Health Care Fund. Navarro's addition follows the departure of PREM LACHMAN, formerly a partner and portfolio manager providing coverage of the pharmaceuticals, contract services and distribution sector. Lachman launched his own venture, Maximus Capital, with the help of former Moore Capital Management professional Joanne Soja and former Morgan Stanley Dean Witter portfolio manager Teresa McRoberts. Many of Galleon's other offerings tend to weigh more heavily in tech, including the Galleon Omni Fund (formerly known as Needham Omni Fund), the Calypso Advisors LLC and Needham Emerging Growth Partners, LP. Top five holdings for the quarter ended March 31, 2001 included: Corvis Corp. [CORV] with 11,050,000 shares (valued at $77.7 million); Nasdaq 100 Trust [QQQ] with 1,850,000 shares (valued at $72.4 million); Microsoft Corp. [MSFT] with 1,050,000 shares (valued at $57.4 million); Compaq Computer Corp. [CPQ] with 2,000,500 shares (valued at $36.4 million); and, Gateway Inc. [GTW] with 2,094,800 shares (valued at $35.2 million). Top five new purchases included the firm's largest holdings: switching and routing equipment maker Corvis Corp. as well as Compaq and Gateway. Rounding out the top five are Texas Instruments Inc. [TXN] with 1,000,000 shares (valued at $31.0 million) and Exodus Communications Inc. [EXDS] with 2,050,000 shares (valued at $22.0 million). --------------------------------------------------------- SECTOR COVERAGE: ALLIANCE CAPITAL MANAGEMENT L.P. *PAUL RISSMAN: Director of Global Equity Research *MIKE BALDWIN: Associate Director of Research *CHRIS ARISTIDES: Internet software & security and enterprise hardware & storage *ROBERT ASHTON: telecommunications services *JACQUES BOUTHILLIER: machinery, building products, hardware & tools, pollution control, paper, paper products and containers *VINCENT DUPONT: optical components *NORMAN FIDEL: pharmaceuticals and healthcare services *ANDREW FRANK: enterprise software & communications semiconductors *MARISA GILLIAM: printing, publishing & advertising *LISA HINTZ: insurance, brokerage & money management *KATHLEEN KOLTES: quantitative analysis *LARRY KREICHER: economist *VIVIAN LEE: airlines, leisure, restaurants, lodging, education services and toys *SUSANNE LENT: multi-industry, rails, electrical group, and aerospace/defense *KRISTIN MANTON: retail, apparel, department stores, and apparel/footwear *SCOTT MCELROY: beverages, food, retail food & drug, household products & personal care *KOMAL MISRA: IT services, mainframes, mainframe software, and contract manufacturing *MATTHEW MURRAY: biotechnology, medical products, and healthcare information technology *RICHARD NEWITTER: quantitative analysis *TANYA ODOM: food and tobacco *NITA PATEL: business processors and wireless data *AMY RASKIN: networking & telecom equipment *TOM SCHMITT: oil & oil service and commodity/specialty chemicals *JANE SCHNEIROV: multi-industry, automotive and connectors *GERRI SOMMERS: retail, hardlines & discounters, and Internet retailers *FRANK SUOZZO: banks, credit, government sponsored enterprises & thrifts *THANH TRAN: media & entertainment and broadcasting/cable *ANNIE TSAO: electric utilities, natural gas pipelines, and independent power producers *JANET WALSH: semiconductors and semiconductor equipment *STEVEN WELLER: telecommunications services and satellites ---------------------------------------------------------- NOTE: Positions reported are derived from 13F filings, which do not include cash figures, and may not be representative of a firm's equity assets as of March 31, 2001. In addition, if a firm is hedged with many short positions, when reversed they may appear as net purchases. ----------------------------------------------------------- Questions, comments or if you would like the MMM staff to investigate any news heard on the Street, please send inquiries to staff@news.moneymanagermonitor.com, or call (212) 510-9263. -------------------------------------------------- ?Money Manager Monitor. 2001. Although no assurance can be given for its accuracy, the information contained in this report was obtained from sources considered reliable. Except for making one printed copy of this document, published by The Money Manager Monitor, it may not be reproduced, republished, broadcast or otherwise distributed without prior written permission from The Money Manager Monitor. --- You are currently subscribed to carson_mmm as: jwillia@enron.com To unsubscribe send a blank email to leave-carson_mmm-151245F@news.carsongroup.com
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