If it ain't broke,why not clone it?What do you do when one...

BANKING & FINANCE

December 17, 1992|By David Conn

If it ain't broke,why not clone it?

What do you do when one of your more successful mutual funds attracts the attention of wealthy individual investors? You "clone" it, with a money management product that uses the investment strategy of the mutual fund, but provides the individualized attention that wealthy investors demand.

That, at any rate, is what Kyle P. Legg has done.

As senior vice president of Legg Mason Capital Management, Ms. Legg has been doing equities research, especially for Legg Mason's Special Investment Trust. That $266 million fund (as of Nov. 30) focuses on small- to mid-cap stocks, and has outperformed the Standard & Poor's 500 Index since the beginning of 1988.

This week, Ms. Legg and Bill Miller, president of the company's mutual funds group, launched Legg Mason Small Cap Management.Its investment approach will "parallel that used in the management of our small-cap mutual fund, Legg Mason Special Investment Trust," the two said in a memo to brokers.

The new money management product, with a minimum $500,000 investment, is aimed at small institutions and individuals with a high net worth, Ms. Legg explained.Legg brokers who turn over their clients' accounts to Ms. Legg and Mr. Miller will still earn a share of the fees and commissions, Ms. Legg said.

But how many of the brokers will turn over their best accounts? Some probably won't, Ms. Legg acknowledged.

But "the market has become so volatile," she added, "that a lot of brokers would rather have their clients' funds professionally managed."

No response yet from the brokers.

Chase goes south for new Md. chief

Chase Bank of Maryland is getting a Latin flavor. Its parent company, Chase Manhattan Corp., announced yesterday that it has replaced outgoing president and chief executive officer Kevin G. Byrnes with Lywal Salles, head of consumer financial services for Banco Chase Manhattan, S.A., in Rio de Janeiro, Brazil.

As noted last week in this column, Mr. Byrnes will end his four-year Maryland stint by taking over Chase's $3 billion Long Island, N.Y., division at the start of the year.

Mr. Salles, 46, worked in marketing for Time Inc. in New York and Rio before he moved to Chase's Brazilian subsidiary in 1985 as consumer marketing and planning manager.He supervised the company's 16 branches in Brazil, did consumer marketing in Chile and moved back to his native Brazil in February.

A 1969 graduate of the Federal University of Rio de Janeiro, Mr. Salles also received a graduate degree from Syracuse University.

In a statement, Mr. Salles praised Mr. Byrnes' work at the $1.1 billion (in assets) Maryland bank, "not only in terms of profitability but in getting involved in the community. One of my immediate challenges will be to keep up the momentum that Chase and Kevin created."

Alex. Brown lands United Way account

The United Way may be having a tough year, but Alex. Brown's just got a little better.

The charitable organization told The Sun it has selected Alex. Brown Capital Management, headed by Dorsey Brown, to manage the United Way's $9 million endowment fund.

A request for proposals, circulated among the city's investment firms in September, showed the endowment fund was looking for a manager that will invest anywhere from 40 percent to 75 percent of the money in equities; 20 percent to 50 percent in fixed-income securities; and no more than 30 percent in cash and equivalents.

T. Rowe Price Associates had handled the account since 1979, but apparently did not make the cut this time, after what the United Way called a routine review of management.

Each July, interest and dividends are paid from investments made with the endowment money over the previous 12 months. The last such payment was $325,000, net of expenses, which represents about 3.6 percent of the endowment fund.

The United Way of Central Maryland last year raised $39 million. It had hoped to increase donations by $1 million this year, but already has acknowledged that its fund-raising campaign likely will fall short.

New credit card scam has retailers on alert

In the mood for yet another credit card scam? The Maryland Retail Merchants Association certainly isn't, and it warned its members of the latest twist in a recent "Fraud Alert."

Here's how it works: Somebody gets your credit card account number (and there are far too many ways to do that,unfortunately). With the right equipment, they can reprogram the electronic strip on the back of their own card so that it reflects your account number.

If a retailer runs the thief's card through an electronic reader, but fails to make sure the number that pops up on the screen matches the account number embossed on the front of the card, the purchase will be charged to your account.

The association advises retailers to check ID carefully, and to make sure the electronic number matches the one on the card. And here's a piece of sensible advice: "If it does not match, do not do anything that would provoke violence."

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