Another Strong Hire for a Growing Firm
When Strong Funds hired Mary Lisanti a couple of weeks ago, the Milwaukee firm got more than just a top-notch money manager: It also got a vote of confidence.
Lisanti ranks among the nation’s best small-stock investors, having recently earned accolades from Barron’s and Kiplinger’s Personal Finance Magazine. Before buying a stock, she gives the company a careful examination, looking especially hard for indications of strength and adaptability.
So when Lisanti decided to step down as manager of the Bankers Trust Investment Small Cap Fund and leave her native New York to join Strong, it was an indication that she saw in her future employer the same qualities she searches for as an investor.
“This is a company that not only knows how to grow, but knows how to execute,” says Lisanti. In June, she was honored as a “superstar of tomorrow” by Kiplinger’s; in July, Barron’s rated her the country’s No. 1 fund manager.
Lisanti is not the first marquee stock picker to change firms and join Strong in recent years. The list also includes Ronald Ognar, formerly of Kemper Financial Services, and Richard Weiss and Carlene Murphy of Stein Roe. Murphy later left to start her own fund family, Artisan Partners, with husband Andrew Ziegler, a former president of the Strong group.
Strong’s ability to attract good managers and keep most of them has accompanied an impressive span of expansion for the firm. From $1 billion and eight funds in 1986, Strong now counts $20 billion and 31 funds.
Of the 15 Strong funds old enough to be rated by Morningstar Inc. of Chicago, eight have superior rankings, five are at average and only two score below par. The New York-based Value Line Mutual Fund Survey gives similarly good marks to the Strong portfolios it follows.
Kurt Brouwer of Brouwer & Janachowski, a San Francisco investment advisory firm, dates Strong’s rejuvenation to the start of this decade, after the company’s bond funds slogged through a couple of years of dismal performance stemming in part from the junk bond slump of the late 1980s.
“I think it persuaded [Chairman Richard] Strong that he needed to grow the firm,” says Brouwer, who rates the Strong Opportunity and Common Stock funds among his favorites. The latter is currently closed to new investors.
The company has been able to hire or develop good managers in part because it offers stock options to its top talent--the type of incentive arrangement that gives fund managers a reason to stay.
The company’s culture stresses teamwork and recognition of individual efforts, says Lisanti.
“Everyone is called an ‘associate,’ not an employee, and you get your parking place and locker assignments depending on when you joined the firm,” she says.
Lisanti and others also credit founder Richard Strong for giving portfolio managers plenty of room to do their own thing. Strong himself manages the firm’s Discovery Fund and travels about a third of the time in search of promising stocks.
Even when he’s in town, Strong likes to spend a couple of hours each day sipping coffee at a local Denny’s as he sifts through annual reports and financial magazines.
In other words, the boss isn’t around the office all the time breathing down everybody’s neck.
“They’re autonomous,” Strong says of his fund managers. “They all have their different styles.”
The company also has a few nonemployees managing mutual funds under its banner. These include William Reaves, who runs the Strong American Utilities portfolio from his office in New Jersey, and David Schafer, who manages the Strong Schafer Value Fund from New York.
The Strong fund family has a good mixture of managers pursuing the growth and value stock-picking styles. Lisanti’s arrival will give the firm its first star in the realm of truly small stocks--those in corporations whose shares are worth about $500 million or less.
Even so, the Strong group still lacks a dominant large-stock fund. And its flagship international-stock portfolio, while off to a decent start, carries higher costs than other Strong funds, not to mention rival foreign-stock products from the likes of Vanguard Group, T. Rowe Price Associates and Warburg Pincus. Strong was a latecomer to international investing.
But that still leaves two major categories in which Strong excels: bond portfolios and stock funds specializing in medium-size firms worth between roughly $500 million and $5 billion.
The Strong mutual funds ([800] 368-1030) are marketed without a load or sales charge. Minimum investments range from $250 to $2,500, depending on the fund. But the company waives those threshold requirements for people willing to invest $50 or more each month and who agree to have the money taken directly from their checking or savings accounts.
