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MONEY MANAGER MONITOR
FOR THE WEEK ENDED NOVEMBER 16, 2001 ----------------------------------------------------------- THIS WEEK: ***NOTABLE CONTACT MOVEMENTS ***MERGERS & ACQUISITIONS ***NEWS ***JOHN JARES RETURNS TO FOUNDERS ***BRUCE WASSERSTEIN RESIGNS ***PIONEER COMPLETES INTEGRATION ***BOICH FORMS AVERA GLOBAL PARTNERS ***GALLEON REPORTS SANS KRISHEN SUD ***SECTOR COVERAGE: AELTUS INVESTMENT MANAGEMENT ----------------------------------------------------------- NOTABLE CONTACT MOVEMENTS U.S.: *DEAN DUMONTHIER, formerly a portfolio manager with Artisan Partners, recently left the firm. DuMonthier joined the firm in early 2001 from Strong Capital Management to manage the Artisan Mid Cap Value Fund, which he co-managed with Marina Carlson. Carlson continues to manage the fund. *MARY ENGLISH was recently hired by Standard Life Investments' Boston office to head its U.S. equity team. Prior to joining Standard Life, English was employed by Freedom Capital Management as a portfolio manager. Joining English in the firm's Boston office is RONNIE PETRIE, who will move from Standard Life's Hong Kong office, and MARK LIN, an analyst in the firm's Montreal office who is expected to relocate to Boston in 2002. *JILL GREENWALD, CFA will rejoin Fred Alger Management, Inc. on November 19, 2001 as a portfolio manager and senior analyst with responsibility for the firm's small-cap portfolios. Previously, Greenwald was a senior vice president and investment officer with J. & W. Seligman & Co., where she co-managed the Seligman Emerging Growth Fund. Before working at Seligman, Greenwald held numerous positions with Chase Asset Management, where she served as an analyst and co-manager of the Chase Vista Small Cap Opportunities Fund, and later served as a senior portfolio manager with responsibility for the Chase Vista Small Cap Equity Fund. Greenwald began her career in 1986 as an analyst covering the consumer, semiconductor and transportation sectors with Fred Alger Management. *THERESA HAMACHER, chief investment officer of Pioneer Investment Management, resigned in the beginning of November. John Carey has assumed her role. *RICHARD MAYO, a co-founder and portfolio manager with responsibility for U.S. active equity portfolios with Grantham Mayo Van Otterloo & Co., is leaving the firm to launch a hedge fund with his son R. SCOTT MAYO, a portfolio manager with John Hancock Financial Services, according to reports by the Boston Globe. *ANAND MORE, previously a security analyst following the global capital markets at Citigroup Global Asset Management, recently left the firm. *ERIC N. REMOLE and MICHAEL A. WELHOELTER recently joined Fleet Asset Management Group to form a new Structured Equity Portfolio Management Group. Remole joins Fleet as a managing director and Head of Structured Equity, and Welhoelter joins Fleet as a vice president reporting to Remole. Remole and Welhoelter were previously employed by Credit Suisse Asset Management, where Remole was a managing director and head of Global Structured Products and Welhoelter was a vice president and portfolio manager for Global Structured Products working with Remole. *KEVIN P. RILEY retired from Roxbury Capital Management, LLC in 2001 where he served as a senior managing director. *BRIAN SPRATT, a portfolio manager with Munder Capital Management with responsibility for the Munder Equity Income Fund and the Munder Power Plus Fund, recently left the firm. Richard Giesen will continue to manage the Power Plus Fund. Additionally, LOUISE KIM, an analyst following technology, and ROBERT MCAREE, an analyst following the chemicals sector, also left the firm. *DANIEL SZENTE, chief investment officer of the California Employees' Retirement System (CalPERS), resigned and will officially step down at the end of November. Szente was previously employed as director of research by McGlinn Capital Management Inc. Szente is expected to join San Francisco-based McMorgan & Co. in the beginning of December, succeeding Melvin Petersen who is retiring. CANADA: *VINCENT G. ROY, formerly a portfolio manager at Toronto office of Perigee Investment Counsel Inc., left the firm in October 2001. No one has taken over his position at this time. Prior to joining the firm in 1996, he was employed at Ontario Municipal Employees Retirement System. SELL-SIDE: *HENRY BLODGET, once a star Internet analyst at Merrill Lynch & Company Inc., is leaving the firm. Blodget is expected to take some time off to write a book, appropriately, about the Internet stock bubble. He is also expected to join a buy side firm or a hedge fund in the next three to six months. *ED FROELICH, a restaurant and beverage analyst with Pershing, a division of DLJ, retired. Marc Spellane has replaced him. *DAVID GARRITY, formerly a security analyst covering e-business platforms and supply chain management with Dresdner Kleinwort Wasserstein, recently left the firm. *CLIFF RANSOM, a security analyst covering aerospace/defense, electrical equipment, electronics/defense, engineering & construction, hardware & tools, machinery- diversified, machine- tools, manufacturing- diversified and transportation with State Street Research & Management, is expected to join Philadelphia-based Janney Montgomery Scott as Director of Research. ----------------------------------------------------------- MERGERS & ACQUISITIONS *November 15, 2001- Phoenix Investment Partners completed the acquisition of a 65% stake in Englewood, CO-based Capital West Asset Management, which managed approximately $216.4 million in equity assets according to the 13F filed for the quarter ended September 30, 2001. Phoenix may acquire an additional 10% by the end of 2006. This deal follows the announcement earlier this week that Phoenix would acquire a majority stake in Kayne Anderson Rudnick Investment Management, LLC, which managed $5.8 billion in equity assets according to the 13F filed for the quarter ended June 30, 2001. Phoenix will purchase an initial 60% stake in Kayne Anderson and will increase its interest by 15% by 2007. The remaining stake will be retained by Kayne Anderson Rudnick management. The transaction is expected to close in the first quarter of 2002. Kayne Anderson Rudnick's operations will remain unchanged and existing management will continue to be responsible for day-to-day management of the firm. *October 31, 2001- Boston, MA-based Berents & Hess Capital Management, Inc. merged with North American Management Corp. Berents & Hess now operates as North American Management Corp. The two firms have consolidated at the following location: Ten Post Office Square, Suite 300, Boston, MA 02109. North American Management managed approximately $265.7 million in equity assets according to the 13F filed for the quarter ended September 30, 2001. ---------------------------------------------------------- NEWS *Keefe, Bruyette & Woods, Inc. signed a lease for new office space in midtown Manhattan. KBW's headquarters will be located on the fourth floor of The Equitable Building at 787 Seventh Avenue. In addition, KBW Asset Management has signed a lease for new office space in Hoboken, New Jersey. Effective December 1, 2001, KBW Asset Management will be located at 2 Hudson Place at Baker Waterfront Plaza in Hoboken. KBW Asset Management will maintain satellite space in New York City for client meetings. *In December 2001, shareholders are being asked to vote on a proposal to merge the Analytic Enhanced Equity Fund with the PBHG Disciplined Equity Fund. If approved Pilgrim Baxter & Associates, Ltd. will serve as investment adviser to the fund with Analytic Investors, Inc. serving as sub-adviser. Both Analytic Investors and Pilgrim Baxter are affiliates of UAM, which is a subsidiary of Old Mutual. *On November 15, 2001, Knight, Bain, Seath & Holbrook unveiled a new name and brand identity. The firm now operates as KBSH Capital Management Inc. In a statement made by the firm, "The brand will enjoy better recognition in the marketplace, helping to produce a stronger firm with more resources, and further enhancing investment returns and providing a greater choice of value-added products for its clients." ---------------------------------------------------------- JOHN JARES RETURNS TO FOUNDERS On November 13, 2001, the Dreyfus Founders Funds submitted several mutual fund filings with the SEC. While this is a common occurrence, what was not so common was the statement at the bottom that read, "Thomas M. Arrington and Scott A. Chapman...are no longer associated with Founders." This departure could have been quite a blow to Founders; however, to soften the impact the firm announced that it would be welcoming back a familiar friend. Now that Arrington and Chapman are moving on, the multitude of funds that they managed are being handed off to JOHN JARES. Jares joins the firm from Delaware Investment Advisors where he served as a portfolio manager for several of Delaware's funds including the Delaware Balanced Fund. On his return to Founders, Jares is receiving quite a warm reception and vote of confidence as he is handed management responsibility for the Dreyfus Founders Focus, Dreyfus Founders Growth Fund (with $1.1 billion in equity assets as of 6/30/2001), the Dreyfus Founders Growth and Income Funds (with $308.0 million in equity assets as of 6/30/2001), and the domestic portion of Worldwide Growth Fund (with $154.4 million in equity assets as of 6/30/2001). But then again, Jares and Founders are hardly strangers; from 1994 to 1997, Jares was employed as a portfolio manager at Founders. The next move for Chapman and Arrington is not known at this time, however history has shown that the two are likely to stick together for a long time to come. Back in December 1998, the duo joined Founders from Highmark Capital Management, where Arrington served as vice president and director of income equity strategy and portfolio manager of the Highmark Income Equity Fund, while Chapman served as vice president and director of Highmark's growth strategy and managed the Highmark Growth Fund. ----------------------------------------------------------- BRUCE WASSERSTEIN RESIGNS BRUCE WASSERSTEIN, the powerful investment banker who recently sold his company, Wasserstein Perella to securities giant Dresdner AG, has resigned. Wasserstein was under increasing pressure this week to take control over Lazard LLC. After the sale of Wasserstein Perella earlier this year, Wasserstein became increasingly sour about the deal; Dresdner recently agreed to merge with insurer Allianz AG, effectively squelching the plans Wasserstein had held for the newly merged firm, Dresdner Kleinwort Wasserstein Securities LLC. Wasserstein reportedly had numerous qualms about taking over Lazard, however after weeks of speculation the move was finally made official on November 15, 2001 as Lazard announced that Bruce Wasserstein would join as Head of Lazard succeeding Michel David-Weill. In a press release issued by Lazard, Mr. Wasserstein said, "I am delighted to join Lazard. We've been discussing this possibility from time to time for over 15 years. When I began my own firm, I aspired for it to become like Lazard. Lazard has an unmatched franchise with extraordinarily talented partners. I look forward to working with all my new colleagues." ----------------------------------------------------------- PIONEER COMPLETES INTEGRATION As of November 1, 2001, Boston-based Pioneer Investment Management Inc., a unit of UniCredito Italiano in Milan, successfully completed its yearlong integration process with the parent company's money management arm in Dublin. Executives at both locations will report to Giordano Lombardo, Global Chief Investment Officer. Under the new system, research analysts are organized into industry sectors as opposed to being assigned to particular funds. Marco Pirondini, Head of Global Equity Research, manages the team of 34 from Boston. Focused on fundamental research, the team is divided into seven groups representing MSCI global sector categories. Research is now considered a career track at Pioneer instead of a training ground to become a fund manager, according to Steve Graziano, president of sales operations. "A stock analyst is a career unto itself," Graziano continued. "It's a profession that's paid equally lucratively as portfolio management, and you become an expert in an industry." Unfortunately, because the reorganization effectively limited her role, Theresa Hamacher decided to resign as Pioneer's U.S. Chief Investment Officer effective November 1. Hamacher's departure had been anticipated since June, when it was decided that she would report to Mr. Lombardo instead of to a local chief executive. Hamacher was not pushed out; Mr. Graziano said: "Absolutely not. Theresa decided the role of CIO was not what it was when she first got here. It was less important." In a statement, Mr. Lombardo commented: "We are disappointed that Theresa has decided to resign, but respect and understand her decision. She played a key role in the development of the investment process of the new Pioneer." Hamacher joined Pioneer in 1997 from Prudential Mutual Funds to oversee stock investments. The next year she became investment chief and was assigned to shift Pioneer from a star manager model to a team approach. Hamacher has not said where she plans to work next. Pioneer Global Asset Management S.p.A. and its subsidiaries managed approximately $93 billion as of September 30, 2001 under the name Pioneer Investments. ---------------------------------------------------------------------------- ---------- BOICH FORMS AVERA GLOBAL PARTNERS Avera Global Partners, L.P. is a new San Francisco-based hedge fund company founded this year by JOHN D. BOICH, a former principal and senior portfolio manager of global equities at Montgomery Asset Management, L.P. Prior to his departure from Montgomery Asset Management, Boich co-managed the Montgomery Global Long-Short Fund, the Montgomery Global 20 Fund and the Montgomery Global Opportunities Fund. His new venture specializes in alternative investments and provides investment advisory services for a variety of vehicles including onshore, offshore and separate accounts. The main product of this firm is a global long-short equity fund. Among those who joined Boich at Avera Global Partners, L.P. are: -J. PHILLIP OELZE, JR., CFA, President and Chief Operating Officer. A former vice president, regional investment manager at Wells Fargo Bank Arizona N.A., Oelze brings along with him 15 years of operational management experience. At Wells Fargo, Oelze directed all operational aspects. -SCOTT F. KLIMO, CFA, Senior Fundamental Analyst. Klimo formerly served as a senior international analyst at Founders Asset Management focusing on large-cap growth issues. He has had experience covering continental Europe, Canada, Australia, New Zealand, Southeast Asia, and Latin America. -ERIK RENANDER, CFA, Senior Fundamental Analyst. Like Boich, Renander was formerly with Montgomery Asset Management, L.P. He was as an analyst on the global research team. -JOSEPHINE CHU, CFA, Senior Quantitative Analyst. Chu formerly served as a portfolio manager at Barclays Global Investors where she managed the MSCI EAFE International Equities Index Funds. Prior to that, Chu was a portfolio manager in the quantitative products group at Scudder Kemper Investments, where she developed and enhanced quantitative models. -MARK KRESS, CFA, Senior Quantitative Analyst. Kress formerly served as an analyst at Trinity Equity Management, where he developed and implemented quantitative financial screening models and risk management procedures, in addition to equity valuation models to identify long and short investment candidates. -ROBIN UDANY, Senior Trader. Uday joins the firm from The Cypress Funds, where she handled the day-to-day trading activities. Prior to The Cypress Funds, she created and developed Nomura Securities' Dow Jones Index Arbitrage desk. She has also worked as a fixed-income futures and options specialist and an energy futures and options trader. -SHADI ABOUKHATER, Senior Trader. AbouKhater joins Avera from Hilspen Capital Management where he executed the majority of trades, handling trade breaks, reconciliation, performance tracking and maintenance of client accounts. The firm relies on the belief that relative earnings momentum is what drives absolute as well as relative stock price performance. The foundation of the firm's investment philosophy is built upon the idea that companies with improving earnings momentum trading at a discount to their region and sector will outperform, while companies with deteriorating earnings momentum trading at a premium to their region and sector will under perform. The firm utilizes both quantitative and qualitative techniques in identifying long and short candidates from an initial universe of the 2000 largest publicly traded companies globally (excluding emerging markets). Avera Global Partners uses relative earnings momentum metrics and a quantitative ranking system built primarily around valuation metrics to scale down their investment universe. Fundamental analysis is conducted at the company and sector level, and modeling tools are used to identify trends and inflection points in earnings momentum. As the forecast horizon rarely exceeds six months, the firm tends to focus on near-term earnings trends. At the sector level, analysts monitor sector specific data series such as order trends and inventory levels. After the investment universe is narrowed down to a short list of long and short candidates, the firm employs portfolio optimization technology to help identify the long and short candidates for the final portfolio. ---------------------------------------------------------- GALLEON REPORTS SANS KRISHEN SUD For the third quarter ended September 31, 2001, New York-based Galleon Management L.P. reported ownership of 179 companies, valued at $656.4 million, a decline from the previous quarter when the firm reported ownership of 177 companies, valued at $1.1 billion. The most probable reason for the decline is the recent departure of former Galleon healthcare star KRISHEN SUD. Galleon and Sud recently had a falling out, following Sud's departure to form healthcare oriented hedge fund Argus Partners. In the beginning of June 2001, Sud left the firm with three other healthcare analysts after failing to get full control of the healthcare fund. His intentions to leave the firm, however, were not made known to Galleon's other partners until the day he actually left. According to Dow Jones Newswires, "in a letter to shareholders dated October 4th, Sud acknowledged making 'several mistakes' in exiting Galleon." SAM NAVARRO, who was added to Galleon earlier this year, has since taken over healthcare responsibilities at Galleon. Galleon, run by RAJ RAJARATNAM, has traditionally focused on the technology and healthcare sectors. Most recently, the firm's investments were concentrated in technology (72.6%), healthcare (15.8%), and communication services (4.6%). Since its previous filing, Galleon reported net inflows into the technology and communication services sector, and a net reduction in its holdings in healthcare, financials, and consumer staples. Top five holdings for the third quarter ended September 31, 2001 included: Cisco Systems Inc. [CSCO] with 3,871,188 shares (valued at $47.2 million); Microsoft Corp. [MSFT] with 750,000 shares (valued at $38.4 million); Texas Instruments Inc. [TXN] with 1,400,000 shares (valued at $35.0 million); Solectron Corp. [SLR] with 2,892,500 shares (valued at $33.7 million); and, Nvida Corp. [NVDA] with 917,000 shares (valued at $25.2 million). The firm's top new positions included the firm's purchase of Nvidia. Rounding out the firm's top five included Semiconductor Holders Trust (Dep Rcpt) [SMH] with 539,500 shares (valued at $14.8 million); Dell Computer Corp. [DELL] with 724,600 shares (valued at $13.4 million); and, Qualcomm Inc. [QCOM] with 261,200 shares (valued at $12.4 million). ----------------------------------------------------------- SECTOR COVERAGE: AELTUS INVESTMENT MANAGEMENT Large-Cap: *KENNETH BRAGDON *JEFFREY BIANCHI: healthcare, HMOs, technology *JENNIFER CUTE: financials *JOHN MCKENNA: capital goods, aerospace, raw materials, consumer staples, consumer cyclicals, and utilities *JEFFREY WHITNEY: technology, telecommunications Growth & Income: *DONALD TOWNSWICK *CAROLIE BURROUGHS *JULIE GLYNN Small-Cap: *THOMAS DIBELLA: all small-cap sectors *RICHARD DICHILLO: small-cap technology *PAUL FLYNN: all small-cap sectors *KEN GAINEY: all small-cap sectors *ROSALIE JING: healthcare *JOE KROCHESKI: energy, utilities, manufacturing, raw materials *DONALD KUNKEL: financials, consumer goods, REITs International Equity: *VINCE FIORAMONTI *LYNNE CARLSON: consumer products, healthcare, manufacturing *ALLEN CHOINSKI: technology & telecommunications *RALPH PETERS: international strategy and currency trading Aggressive Equity: *GEOFFREY BROD Enhanced Strategies: *HUGH WHELAN *DOUG COTE *JOHN KREMENTOWSKI *HARISH KUMAR Quantitative Research: *PETER SWANK *KURT CUBBAGE Portfolio Specialist: *MARY ANN FERNANDEZ *CHRISTIE BULL *LEAH MEYER ---------------------------------------------------------- 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 September 30, 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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