Tackling the heavyweights Vision: The popular president of Allied Investment Advisors wants to make it the "premiere investment management firm" in the region.

October 04, 1998|By Bill Atkinson | Bill Atkinson,SUN STAFF

Twenty-one years ago, Jennifer W. Lambdin stood awe-struc amid a crush of boisterous traders on the New York Stock Exchange.

She was just out of college and a junior portfolio manager at First National Bank of Maryland, and had traveled to Wall Street to see how the world's most important stock exchange functioned.

She was assigned to shadow a sharply dressed "specialist," who filled orders for brokers who want to buy a stock. Minutes before the market opened he turned to a colleague and said: "Give me the Maalox."

He took a long swallow, then turned to Lambdin with a smile: "It comes with the territory."

Today, Lambdin is president and chief investment officer of Baltimore-based Allied Investment Advisors Inc., the investment arm of First National, and she knows all about Maalox.

In August, during a tremendous upheaval in the stock market, Allied's portfolio fell by about $500 million, an investment in Linthicum-based Ciena Corp. blew up, resulting in about $10 million in paper losses, and overall performance has sagged with the rest of the industry.

"Sometimes you have to laugh to lighten the stress," said Lambdin, 43. "There is a lot of pressure in this business."

But Lambdin knows that bumps and bruises are part of the money management game. And Allied's performance has been solid even in this volatile market.

Six of its nine equity funds, which trade under the ARK Funds name, are beating their peer group returns, according to New York-based Lipper Analytical Services Inc., which tracks mutual funds. ARK's Capital Growth fund was up 5.25 percent on Sept. 17, since the beginning of the year, compared with an average return of 0.21 percent for competing funds. And its Small-Cap Equity fund is down 6.76 percent, compared with an average return of negative 17.26 percent for small-cap funds.

Allied, which manages money for pension funds, unions, hospitals and private investors, has also been growing briskly. Since it was spun off from First National in July 1996, the number of new clients is up about 35 percent to 270. Assets under management have nearly doubled to about $11 billion, and it manages 20 mutual funds, up from nine.

Lambdin aims to add $4 billion in assets in the next three years and eventually build Allied into the "premiere investment management firm" in Baltimore, Washington, Northern Virginia and southern Pennsylvania.

That is an ambitious plan, especially with such heavyweights

such as T. Rowe Price Associates Inc. and Legg

Mason Inc. in Allied's back yard, and the ability of other large fund companies to penetrate its client base.

James Hardesty, president of Baltimore-based Hardesty Capital Management, said it won't be easy for Allied to dominate the region.

"It is difficult for banks that are regionally oriented to spend sufficient funds on marketing and advertising to compete with ,, the national fund complexes," he said. "The cost is staggering."

Colleagues say if anybody can build Allied into a brawny competitor, it's the tall and slender Lambdin. She is a seasoned investor, has a knack for getting projects accomplished inside -- the bank, and is well liked, not only by her staff, but by senior management.

"She is a rare bird," said Charles W. Cole Jr., vice chairman of Baltimore-based AB Capital Advisory & Trust, and the former president and chief executive of First National. "It is one thing to read numbers, it is another thing to have a feel for a company's viability for its earnings and long-term sustainability. She is able to grasp all of these and blend it together for good recommendations."

'Logical choice'

Allied Chairman Walter Fatzinger calls Lambdin the "most popular person in the company" -because her investment performance has been strong and she is easy to get along with.

"She was the logical choice to be president of that company," he said.

J. Eric Leo, Allied's director of equity investments, who left Legg Mason Inc. 1 1/2 years ago to joined the firm, said he was prepared to move to New York for a job until he met Lambdin.

He credits her for persuading First National's executives to spin Allied off from the bank. It was important that Allied have its own identity, because banks are typically viewed as stodgy institutions that are better lenders than money managers.

"She has the respect of senior management, which made them more comfortable with the spinoff," he said.

Leo said she was instrumental in winning a bid to manage about $90 million from a subsidiary of Dublin, Ireland-based Allied Irish Banks PLC, which is First National's parent. "I think that her stature within the organization caused them to say, 'We ought to given them a shot,' " he said.

Managing billions of dollars and bantering about price-to-earnings ratios and sector analysis was far from anything Lambdin imagined herself doing. As a youngster growing up in Bel Air, she wanted to become a French teacher or a doctor.

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