High hopes for small stocks

0 Comments | Milwaukee Journal, The, Apr 2, 1995 | by Kathleen Gallagher

Hurwitz began her career as Ziegler's research assistant at SteinRoe.

"Her first job was working for me, so stylistically we're on the same wavelength," Ziegler said.

Lipper said he wouldn't let concerns about Ziegler working out of a smaller firm stop him from investing in Artisan Small Cap.

"The nice thing for the investor is that you don't have to put a lot of money in," he said. Lipper said investors who know and like Ziegler's style could commit a small amount of money to Artisan Small Cap, then add to that position if Ziegler Leg 4 ends here performs well.

Investors in the fund probably would be allowed to add to their stake even after it closed, Lipper added.

Weiss' Strong Common Stock Fund is closed to new investors, so Artisan Small Cap is a good way to get into a fund that buys smaller companies, Phillips, of Morningstar, said.

But what happens if the market takes a downturn and Artisan Small Cap gets stuck in low gear? If Ziegler isn't among the top performers, will investors and the company's financial backers bail out?

"We understand that we're backing one person with one style, and the world can be, for short periods of time, very hostile to one style," said Matt Barger, a partner at Hellman & Friedman in San Francisco.

Barger is part of a private investor group composed of 12 partners and employees of Hellman & Friedman, an 11-year-old San Francisco investment banking firm. The firm has backed several major US money management firms.

Artisan's other backers include:

{} Sutter Hill Ventures, a firm in Palo Alto, Calif., that is the oldest venture capital firm on the West Coast.

{} Arthur Rock, an independent venture capitalist in San Francisco and a seed investor in Apple Computer Inc. and Intel Corp., among other companies.

{} Jack Byrne, former chairman of Geico Corp. and Fireman's Fund, through the Byrne family trust.

Investor capital will finance two years of operations, and financing is built in for the first few money-management team hires, Andy Ziegler said. He plans to hire three to five additional portfolio management teams over the next three to five years. Each team would manage mutual fund and private investor money.

Ziegler expects to begin looking for another portfolio management team in the second half of 1995, and is leaning toward an international stock fund, an international bond fund or a U.S. stock fund with an investment style that differs from Carlene Ziegler's.

For information about the Artisan Small Cap Fund, call (800) 344-1770.