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MONEY MANAGER MONITOR
FOR THE WEEK ENDED MAY 25, 2001 ----------------------------------------------------------- THIS WEEK: ***NOTABLE CONTACT MOVEMENTS ***MERGERS & ACQUISITIONS ***NEWS ***CAXTON BOOSTS ASSETS UNDER MANAGEMENT ***TUDOR REDUCES EXPOSURE TO TECHNOLOGY ***VIKING GLOBAL: PARTIAL TO COMMUNICATION SERVICES ***DIGITAL CENTURY STICKS TO TECHNOLOGY ***SECOND CURVE MOVES INTO REGIONAL BANKS ***ABN AMRO EXPANDS EQUITY RESEARCH TEAM THROUGH ACQUISITION OF ING BARINGS ----------------------------------------------------------- NOTABLE CONTACT MOVEMENTS U.S.: *DAVID BAILEY recently joined the St. Louis office of Banc of America Capital Management, Inc. as a vice president and portfolio manager for the firm's Private Bank clients. Prior to joining Banc of America, Bailey worked as a portfolio manager, fixed income trader and sales manager with Edward Jones. Additionally, KEVIN BOSCHERT recently joined Banc of America Capital Management, Inc. in St. Louis as an assistant vice president and portfolio manager for Private Bank clients. *A team of four wealth managers including: JON FOLAN, TIMOTHY REDPATH, MICHAEL BOZORA, and BRUCE BLOCKLEY, recently joined Bear, Stearns & Co. Inc.'s Private Client Services Group in San Francisco as senior managing directors. Folan joined the firm from Prudential Volpe Technology Group, where he was managing director and group head of Corporate Venture Services. Redpath also came from Prudential Volpe Technology Group, where he served as managing director and chief administrative officer. Bozora joined the firm from Lehman Brothers, where he served as a senior vice president. Blockley also joined the firm from Lehman Brothers, where he worked as a senior vice president. *JERED HOBSON recently joined Denver, CO-based Founders Asset Management as a security analyst following retail. *JAMIE HOUDE joined New York-based Kern Capital Management as senior vice president and portfolio manager on May 14, 2001 to co-manage the Fremont U.S. Micro-Cap Fund, Fremont U.S. Small Cap Fund, and Fremont Global Fund with Bob Kern, David Kern, and Gregory Weaver. Previously, Houde worked for Zurich Scudder Investments as an equity research analyst. *JOHN HURLEY, managing partner and portfolio manager at Bowman Capital Management, L.L.C., resigned to spend more time with his family, although he is expected to maintain an office at the firm for several months. *JANE HWANGBO, formerly a semiconductor analyst at Bowman Capital Management, recently joined New York-based Kingdon Capital Management L.L.C. as an analyst following the same sector. *LARRY JONES was recently named as the new chief investment officer of Durham, N.C.-based NCM Capital Management replacing Clifford Mpare, who left the firm. Prior to joining NCM Capital, Jones served as president, market strategist and director of research of the Chicago-based Kenwood Group. *ABIGAIL P. JOHNSON was recently named as the new president of Fidelity Management & Research Company, effective June 15, 2001. Johnson replaces Robert C. Pozen, who has decided to pursue other interests at the end of the year. Until then, Pozen will continue to be vice chairman of Fidelity Investments. *SANDRA KIM, previously a security analyst with Schroder Investment Management, left the firm in May 2001. *DOUGLAS KIRKPATRICK recently joined Janus Capital Corporation in Denver, CO as an analyst covering diversified services and staffing. Prior to joining Janus, Kirkpatrick served as a security analyst following communication services at Artisan Partners Limited Partnership. *As a result of Hartford Financial Services Group's acquisition of Fortis Advisers in April 2001, virtually all of Fortis' equity investment team has left the firm, including CHARLES MEHLHOUSE, JAMES BYRD, MICHAEL TENREIRO and MICHAEL ROMANOWSKI. The majority of the fund's previously managed by the firm are now being managed by Hartford Investment Management Company and Wellington Management Company. *DAVID SELVERS recently joined New York-based Intrepid Capital Management, Inc. as a security analyst. Previously, Selvers was employed as a security analyst at Owenoke Capital Management, LLC, his employer since January 2000. *RONALD TEMPLE recently joined the New York office of Lazard Asset Management. Prior to joining Lazard, Temple served as a director and security analyst at Deutsche Asset Management Americas working in the large-cap equity research department. *DIANE WEHNER, previously a vice president and portfolio manager with Danbury, CT-based Benefit Capital Management Corp. (the investment management division of Union Carbide), recently joined GE Asset Management where she serves as a portfolio manager. CANADA: *STEVEN MISENER, CFA, a portfolio manager specializing in small-cap Canadian companies at Toronto-based C.I. Fund Management, recently left the firm. Misener managed the Signature Explorer Fund, which is now managed by Robert Lyon, CFA. SELL-SIDE: *DAVID BREINER joined the San Francisco office of Bear Stearns as a managing director following enterprise software on April 2, 2001. Previously, he served as a vice president/sell-side analyst at Prudential Volpe Technology Group in Menlo Park, California. *ALEX GEIER, formerly a high yield analyst covering the health care services sector at UBS Warburg, has joined the equity research team at the firm replacing healthcare provider analyst Matthew Ripperger, who has left the firm. Additionally, ROSS TAYLOR and JEANNIE LORENZ have also left UBS Warburg. Coverage of their biotechnology and life sciences companies has been temporarily suspended, pending reassignment. *WILLIAM KIDD recently joined Lehman Brothers' New York office as a senior analyst to cover the telecommunications industry focusing on the satellite communications sector. Previously, Kidd was employed by C.E. Unterberg, Towbin where he was a satellite industry analyst. *JAMES MARSH and BRIAN SHIPMAN recently joined the equity research team at Robertson Stephens as senior equity analysts. Marsh will cover broadcasting and satellites companies, while Shipman will cover publishing/advertising companies. Both Marsh and Shipman were previously employed by Prudential Securities. Robertson Stephens also announced the addition of FRANK MARSALA as vice president and senior wireless telecommunications analyst working out of the firm's New York office. Prior to joining Robertson Stephens, Marsala covered the wireless telecommunications sector at ING Barings. *MARK SWARTZBERG recently joined ABM AMRO, Inc. as a North American beverages analyst. Prior to joining the firm in April 2001, Swartzberg was an equity analyst covering the beverages sector at Salomon Smith Barney. ----------------------------------------------------------- MERGERS & ACQUISITIONS *May 22, 2001- Wachovia Corp. board of directors has decided to reject SunTrust Banks hostile takeover bid and instead pursue the proposed merger agreement with First Union Corp. Although there were numerous reasons for the board's decision, a press release issued by Wachovia stated that, "SunTrust is very inexperienced in integration activities, having completed only one transaction with a value greater the $100 million in the past 10 years. The Wachovia transaction is three times larger than any integration attempted to date and is twice as large as the combined assets of all acquisitions completed in the last 10 years." As a result, SunTrust is initiating litigation in Georgia against Wachovia Corp. and its board members as well as First Union. -------------------------------------------------------- NEWS *Following the February 2001 merger of Dow Chemical Company and Union Carbide Corporation, the investment management divisions responsible for managing the companies pension assets are in the process of merging. Union Carbide's Danbury, CT-based Benefit Capital Management is transferring its assets to Dow Chemical's Midland, MI-based Diamond Capital Management. Benefit Capital Management's office is expected to close down in the next month. *Bowman Capital reported to Bloomberg News that it is shutting down its large-cap technology fund and returning approximately $1.5 billion to investors. Additionally, as Barron's reported last week, John Hurley resigned from the firm to spend more time with his family, although he is expected to maintain an office at the firm for several months. *Deerfield Management recently moved to 780 Third Avenue, 37th Floor, New York, NY 10017. *Salomon Smith Barney will change its name next year in an effort to combine all the various businesses of Citigroup Inc. under one common brand. Citigroup will combine the Salomon Smith Barney securities unit and Citibank corporate bank under the name Citigroup Corporate & Investment Bank; the combination will take effect in the first quarter of 2002. ----------------------------------------------------------- CAXTON BOOSTS ASSETS UNDER MANAGEMENT For the quarter ended March 31, 2001, Bruce Kovner's Caxton Corporation reported $9.8 billion in equity assets invested in a portfolio of 1,799 stocks. The firm's assets increased approximately $2.4 billion from the previous quarter in which the firm reported $7.4 billion in equity assets invested in a portfolio of 1,841 companies. Caxton's most heavily weighted sectors remained relatively consistent from the fourth quarter of 2000 to the first quarter of 2001. For the quarter ended March 31, 2001, technology held the top spot with 20.3%. Other heavily weighted sectors included consumer cyclicals (14.3%), financials (14.0%), consumer staples (9.4%), and capital goods (7.8%). Top holdings for the quarter ended March 31, 2001 included: Freddie Mac [FRE] with 848,000 shares valued at $55.0 million; Tyco International Ltd. [TYC] with 1,190,396 shares valued at $51.5 million; Quaker Oats Co. [OAT] with 515,300 shares valued at $50.0 million; Honeywell International Inc. [HON] with 1,207,100 shares valued at $49.2 million; and, Fannie Mae [FNM] with 612,000 shares valued at $48.7 million. In addition to the new positions in Freddie Mac, Tyco, and Fannie Mae, the firm also established new stakes in American Home Products Corp. [AHP] with 821,600 shares valued at $48.3 million and Tosco Corp. [TOS] with 856,100 shares valued at $36.6 million. ----------------------------------------------------------- TUDOR REDUCES EXPOSURE TO TECHNOLOGY For the quarter ended March 31, 2001, Tudor Investment Corporation reported approximately $2.3 billion in equity assets invested in a portfolio of 173 companies. This was a decrease from the previous quarter in which the firm reported approximately $3.1 billion in equity assets invested in a portfolio of 240 companies. Tudor's most heavily weighted sectors for the quarter included consumer cyclicals with 20.7%, consumer staples with 15.6%, health care with 13.5%, technology with 8.9%, and diversified with 8.9%. Since December 31, 1999, when the technology portion of Tudor's portfolio comprised approximately 55.8%, the firm has gradually been trimming its allocation to the sector. The biggest drop came between June 30, 2000 and September 30, 2000, when the firm's 13F reported that technology holdings had dropped from 43.8% to 24.0%. Eight months later, holdings are only a third of what they once were, reflecting the markets souring on the tech sector. Top holdings for the quarter included: Becton Dickinson & Co. [BDX] with 3,192,900 shares valued at $112.8 million; Philip Morris Cos. Inc. [MO] with 2,021,400 shares valued at $95.9 million; Nasdaq 100 Trust [QQQ] with 2,325,000 shares valued at $91.0 million; Caremark Rx Inc. [CMX] with 5,096,540 shares valued at $66.5 million; and, Choicepoint Inc. [CPS] with 1,745,904 shares valued at $59.0 million. In addition to the new position in the Nasdaq 100 Trust, the firm also established new holdings in AT & T [T] with 2,443,600 shares valued at $52.0 million; Albertsons Inc. [ABS] with 1,416,400 shares valued at $45.1 million; American International Group Inc. [AIG] with 505,000 shares valued at $40.7 million; and, AnnTaylor Stores [ANN] with 1,345,100 shares valued at $35.7 million. ----------------------------------------------------------- VIKING GLOBAL: PARTIAL TO COMMUNICATION SERVICES For the quarter ended March 31, 2001, Viking Global Investors, the firm founded by former Tiger Management Managing Director O. Andreas Halvorsen, reported $1.47 billion in equity assets invested in a portfolio of 55 companies. This was a minimal decrease from the previous quarter in which the firm reported approximately $1.49 billion in equity assets invested in a portfolio of 52 companies. Viking Global remains fairly concentrated in a few select sectors, a method that has clearly worked well for the firm so far. According to a February 2001 article in Business Week, the firm was up approximately 89% last year after fees. For the quarter ended March 31, 2001, the firm's most heavily weighted sectors included communication services with 36.9%, consumer cyclicals with 34.1%, consumer staples with 10.9%, financials with 9.8%, and technology with 4.1%. Top holdings for the quarter included Sprint Corp. (PCS) [PCS] with 8,502,200 shares valued at $161.5 million; Centurytel Inc. [CTL] with 4,095,400 shares valued at $117.7 million; BCE Inc. [BCE] with 4,589,600 shares valued at $103.3 million; Ross Stores Inc. [ROST] with 4,103,500 shares valued at $76.9 million; and TJX Cos. Inc. [TJX] with 2,181,800 shares valued at $69.8 million. Two out of the top three new positions and three out of the top five largest buys were from the communication services sector. New holdings for the quarter included Clear Channel Communications Inc. [CCU] with 810,00 shares valued at $44.1 million; AT & T [T] with 1,298,000 shares valued at $27.6 million; SBC Communications Inc. [SBC] with 587,000 shares valued at $26.2 million; McDonalds Corp. [MCD] with 931,000 shares valued at $24.7 million; and, Dollar General Corp. [DG] with 1,141,700 shares valued at $23.3 million. ------------------------------------------------------- DIGITAL CENTURY STICKS TO TECHNOLOGY For the first quarter ended March 31, 2001, Digital Century reported ownership of 24 companies valued at $294.8 million, a marked decrease from the previous quarter when the firm reported ownership of 30 companies valued at $552.5 million. As recently as September 30, 2000, the firm had reported ownership of 29 companies valued at $889.8 million. Throughout recent quarters, the firm's portfolio P/E ratio has been nearly double that of the S&P 500. As many other firms' portfolio P/Es have fallen in the wake of the dot-com boom, Digital Century's P/E has remained high, seemingly making it an aggressive, aggressive growth player. The firm, long a technology player, was founded in 1998 by former Goldman Sachs semiconductor analyst RAJIV CHAUDHRI to focus on the booming tech sector. Overall, the firm had 78.0% of its holdings invested in the technology sector for the first quarter. In its most recent quarter, the firm made small moves into computer software, specialty communications, and communications. Companies in the electronics, entertainment, and services (commercial consumer) decreased the largest amount. Top five holdings for the quarter ended March 31, 2001 included: eBay Inc. [EBAY] with 1,818,000 shares (valued at $65.8 million); AOL Time Warner Inc. [AOL] with 1,414,000 shares (valued at $56.8 million); Exodus Communications Inc. [EXDS] with 1,586,000 shares (valued at $17.0 million); Globespan Inc. [GSPN] with 760,000 shares (valued at $16.6 million); and, BEA Systems Inc. [BEAS] with 425,000 shares (valued at $12.5 million). Interestingly, the firm took no new positions for the quarter. The firm did, however, add to preexisting positions. Companies added to in the firm's portfolio included: Exodus Communications [EXDS]; Veritas Software Corp. [VRTS] with 266,650 shares (valued at $12.3 million); BEA Systems Inc. [BEAS]; Yahoo Inc. [YHOO] with 734,000 shares (valued at $11.6 million); and, Globespan Inc. [GSPN]. ---------------------------------------------------------------------------- -------- SECOND CURVE MOVES INTO REGIONAL BANKS For the first quarter ended March 31, 2001, Second Curve Capital reported ownership of 25 companies valued at $279.6 million, an increase from the previous quarter when the firm reported ownership of 25 companies valued at $213.5 million. Former Tiger Management and Donaldson, Lufkin & Jenrette banking analyst Thomas K. Brown founded the firm in 2000. The firm's investments reflect Brown's background; the firm invests primarily in the financials sector. In its most recent filing, financials account for 98.5% of the portfolio, with a miniscule 1.5% invested in technology. The top three micro sector holdings included consumer finance (29.7%), savings & loan companies (27.6%), and banks (regional) (20.4%). Over the quarter, the firm rotated out of diversified financial companies and brokerages while moving into more traditional banking stocks including companies in the banks (regional), banks (money center), and consumer finance sectors. Brown has gained some notoriety in the news from his very public criticism of Bank of America. The New York Times referred to Brown as a "bomb thrower" when describing his fervent criticism of Bank of America Corp.'s management. In frequent postings to his website, bankstocks.com, Brown has made numerous negative postings, including one titled "Bank of America: The Reign of Terror Continues," and has directly criticized Bank of America CEO Hugh McColl. Interestingly enough, Second Curve's largest purchase for the quarter was 300,148 shares of Bank of America. Top five new purchases included: Bank of America Corp. [BAC] with 300,148 shares (valued at $16.4 million); Sovereign Bancorp Inc. [SVRN] with 1,926,645 shares (valued at $16.3 million); First Union Corp. [FTU] with 481,247 shares (valued at $15.9 million); Americredit Corp. [ACF] with 118,072 shares (valued at $3.8 million); and, Hibernia Corp. (Cl A) [HIB] with 260,226 shares (valued at $3.6 million). Top five holdings for the quarter ended March 31, 2001 included: Household International Inc. [HI] with 1,009,557 shares (valued at $59.8 million); TCF Financial [TCB] with 712,551 shares (valued at $26.9 million); Capital One Financial Corp. [COF] with 352,975 shares (valued at $19.6 million); Pacific Century Financial Corp. [BOH] with 873,664 shares (valued at $16.6 million); and, Bank of America Corp. [BAC] with 300,148 shares (valued at $16.4 million). ------------------------------------------------------- ABN AMRO EXPANDS EQUITY RESEARCH TEAM THROUGH ACQUISITION OF ING BARINGS ABN AMRO announced on January 30, 2001 that it reached an agreement with ING Group to purchase the prime brokerage, corporate finance, domestic equities, and futures and options businesses of ING Barings in North America for $275.0 million. This acquisition assisted ABN AMRO in its effort to offer a globally integrated corporate and investment banking service for its corporate, financial institution and public sector clients. ABN AMRO completed the acquisition of ING Barings in North America on April 30, 2001. The acquisition strengthened ABN AMRO's investment banking and research divisions in a number of sectors, including media, energy, telecom, industrial manufacturing and healthcare, in addition to rounding out the firm's existing sector coverage. The number of U.S. stocks followed by ABN AMRO will double from their current levels. The acquisition also enables the firm to significantly boost its trading capacity over the next two years. Over 1,300 of ING Barings' personnel are expected to transfer with the sale of the U.S. investment banking business to ABN AMRO. The majority of ING Barings' former U.S. research staff has been transferred to ABN AMRO. ABN AMRO is also expecting to dismiss approximately 1000 employees globally, with about 100 staff dismissals within the U.S. investment banking business it bought from ING Barings. ING Group was intent on greatly reducing its North American investment banking presence, as a result of stiffer competition from the larger recently consolidated investment banking entities that were created over the past two years. ING remains committed to investment banking in Europe, Asia and Latin America. In addition, the firm's asset management divisions, Baring Asset Management and ING Furman Selz Asset Management, will continue to operate as a part of ING's global asset management division. Many members of the firm's equity research team have chosen to pursue opportunities elsewhere, including: FRANK MARSALA, formerly a vice president and senior wireless telecommunications analyst with ING Barings, who joined Robertson Stephens; ROBERT J. HOEHN, ING Barings' former director of equity research, who joined Dresdner Kleinwort Wasserstein as the director of North American equity research, and THOMAS LAURIA, a former telecommunications equipment analyst with ING Barings LLC. Joining the ABN AMRO team from ING Barings are the following analysts: ENERGY: *Oil Services: STEPHEN D. GENGARO *Oil Services- Contract Drilling: MATTHEW CONLAN *Oil & Gas- Exploration & Production: JAMES WHIPKEY FINANCIAL & INTEREST SENSITIVE: *Commercial Banks/E-Finance: ANDREW B. COLLINS, STEVEN M. TRUONG *Special Situations: RICHARD C. NELSON HEALTH CARE: *Biotechnology: JAN PAUL MEDINA *Contract Research Organizations/e-Health: RUBY G. HOLDER, MANOJ GARG *Medical Supplies & Technology: KEVIN KOTLER, TAO LEVY, JOANNE K. WUENSCH *Pharmaceuticals: SENA LUND *Specialty Pharmaceuticals: TIMOTHY D. COAN, RON ELLIS INDUSTRIAL MANUFACTURING: *Flow Control: RICHARD ROSSI *Diversifieds & Rail Supply: WENDY B. CAPLAN, RYAN WICK *Electronics Manufacturing/Industrial Supply: PATRICK PARR, JULIE LAPUNZINA *Industrial Technologies: WILLIAM L. POTTER MEDIA & COMMUNICATIONS: *Media/Entertainment: SPENCER WANG *Marketing Services: DAVID B. DOFT *Satellite Communications: DAVID B. KESTENBAUM *Telecommunications Services: GREGORY P. MILLER RETAIL & CONSUMER: *Branded Apparel/Retailing: CHRISTINE KILTON-AUGUSTINE TECHNOLOGY: *E-business Applications: WILLIAM P. LANZON, NATHAN R. PALMER *E-business Infrastructure: GEORGE J. GODFREY, JENNIFER SWANSON *PC Systems & Appliances: ROBERT CIHRA TRANSPORTATION: *Airlines: RAYMOND E. NEIDL, ERIC CHIPRICH *Maritime: STEPHEN D. GENGARO *Trucking/Railroad/AirFreight: DOUGLAS W. ROCKEL, JASON H. SEIDL ----------------------------------------------------------- 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.
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