A Fund Manager Is Born

Randall Eley ranked No. 1 on the "A" list of all U.S. equity managers last year, but can he duplicate that stellar performance managing Eugene Profit's new mutual fund?:

about fabulous technology companies they’re wagering will harness whizzing electron streams or splice DNA molecules. High-profile mutual fund managers, like Michael Price of Mutual Shares, can grab headlines as he did by purchasing an outsized share of Chase Manhattan and prying management to consider a merger. Eley, though, can’t resort to histrionics or swashbuckling antics to make his investments appreciate. Instead, his gains are anchored on time-tested criteria he’s developed and will use again and again to scour the stock market, looking for bargains. The result is a record that managers of growth, value, small-, medium- and large-company funds would die for.

If Randall Eley and his staff of seven were ever to choose a mascot to embody both his style and investment credo, it’d be the weather-beaten, burgundy Chrysler LeBaron their boss ambled about in for nearly 10 years. The modest chariot, which begged for a trip to Earl Scheib and sported nearly 200,000 miles, chauffeured Eley from meetings with clients to home and back. For the first few years of his instructional investing firm, the Edgar Lomax company, the car was the closest thing he had to a luxury. Its replacement was a tad flashier–an eight-yearold Ford Mustang, that evoked snickers whenever Eley’s colleagues wanted to rib him.

Eley’s frugality, though something of a joke around the office, has become a point of pride for the 45-year-old Virginia native. “I’ll tell you that the minute you walk into the offices of some institutional investors and see the lavish art and paintings they’ve hung on the wall, you’d think you were in a museum,” he chortles, leaning back in a leather chair in a modest, but comfortable office 15 minutes south of Capitol Hill. Eley’s modest ways have a purpose, he says: enhancement of shareholder value by keeping costs down. In the first few years, Eley refused a salary. Instead, the family–himself, his wife and four kids-was pushed to live off his savings. Even as the assets he managed grew to the millions of dollars, it wasn’t unusual to spot him on a public bus shuttling back and forth to the local library to research stocks and make photocopies. And if stories of stoic penny-pinching don’t inspire you, Eley’s beginnings in investing sound like the stuff of folktales.

A precocious teen, Eley, the second in a family of five, won his mother’s confidence and became, in effect, her financial administrator, managing everything from the bills to her investments in money market funds. “She trusted me fully, and I worked so I’d never disappoint her,” he reminisces. Having developed a keen eye for the financial world, Eley acquired a taste for more sophisticated investments once he enrolled as an undergraduate in Yale in the late ’70s. He devoured any magazine article or book that helped decipher the stock market and started schooling himself in the art of choosing stocks. “I came up with the idea that we could pool money and create an investment trust for all the family,”

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