Here's an article on Alberto Vilar -->> a most amazing Fund Manager...
worth.com
<<...0n its third anniversary last year, the Amerindo Technology Fund
received a top accolade from fund tracker Morningstar: a five-star
risk-adjusted rating. For the 12 months ended September 1999,
Amerindo's Technology D Fund reaped an astounding 254
percent gain (a month earlier, it had even hit 385 percent, the
highest annual gain ever by a mutual fund).
This recent achievement, according to Vilar, should not have
come as any surprise. "I'm an old general who's been through a
lot of wars," he says. "I've been in this game a long time and got
myself a chestful of medals. You have to be able to take a lot of
pain in this business, and believe me, the floors of my office are
red with blood. We ought to rename the company Pork Chop Hill,
'cause we had to advance a foot at a time under hostile fire."
Vilar launched Amerindo Investment Advisors in 1979, back
when Bill Gates was a 23-year-old Harvard dropout with
computer parts in his garage. "We pioneered the management
of emerging growth portfolios," Vilar is quick to claim. Right from
the start, his focus was new technology: PC manufacturers, chip
makers, and a few select software companies. As a specialist in
these relatively untested futures, Vilar says, he was among the
first to buy into Microsoft, AOL, Oracle, and Yahoo. Amerindo's
focus has always been managing money for institutional
investors, such as pension funds, and wealthy individuals. Even
today, only 10 percent of Amerindo's assets are from its mutual
funds.
"I was buying Cisco for six cents a share," Vilar boasts. But while
his foresight sounds brilliant today, it made for lean living in the
early 1980s, back when tech terminology was so new that
portals were being confused with steamship windows. "My
partner and I spent a long time living on tuna fish," Vilar recalls.
"We'd be so low on money, we'd debate things like, 'What if a
drug baron wanted us to invest $100,000 for him? Would we do
it?' I'd say absolutely not, but he'd get hesitant and say, 'Well, we
wouldn't actually have to sell the drugs."
"Untrue!" laughs Amerindo co-manager Gary Tanaka from his
London office. "We could afford spaghetti sometimes, too," he
qualifies, half seriously. In the early 1980s, Tanaka explains, not
many knew about "chips and semiconductors, so tech investing
was a very hard sell." Household words today, back then they
were new and confusing concepts. Many shops started out as
tech specialists, but it was too darn tough, so they changed their
stripes. "We stayed the course, though," Tanaka says, his voice
suddenly deepening with pride. "We got through the tough times.
We stayed with our hunches. And that's why now we're so good
at what we do."
Even beyond their longevity, Vilar and Tanaka are, by nearly any
measure, an unusual team in tech investing. Both lived through
some of the worst childhood traumas of their generation: Vilar
was exiled from his Cuban homeland and saw his father go
broke when Castro took over, and Tanaka was born in a
Japanese internment camp. But instead of reacting to the
upheavals by taking a conservative approach to the rest of their
lives, both grew into extreme risk takers.
Amerindo doesn't stake its fortune on proven companies. Rather,
it bets on finding a Microsoft before it's Microsoft. To do so,
Amerindo has lead teams of analysts in New York City and San
Francisco, but it also has analysts scattered across the country
who keep feelers out in emerging industries. "In our company,
you can live wherever you want," Vilar says. "Twenty years of
experience has shown us that living apart works much better for
intelligence gathering. Sixty percent of our ideas come from our
analysts who are out there in the field, nationwide, networking
and finding out what's new."
The "Amerindo way," according to Vilar, is to buy a stake in a
company before it's a proven moneymaker, then see it through
from inception to maturity. "A lot of people think that because
we're dealing with hot potatoes that we're buying in the morning
and selling in the evening," Vilar says. "Not true. We make our
buys, then stick with them." Among the still-private companies
that Amerindo and Vilar currently have stakes in, and single out
as great prospects, are: Loudcloud, which is Netscape
cofounder Marc Andreessen's new start-up; Tellme, which
Web-enables the telephone; CoSine, which is registered to
become public and provides network-based IP service platforms;
and ANDA Networks, also registered to become public, which is
providing a universal platform for integrated voice and data
services. Two earlier investments Vilar is particularly proud of,
Ariba and Sycamore, were selected in their prepublic days
because Amerindo had had previous experience with their top
managers. "We've had a hundredfold gain with those companies
in three years," Vilar says.
"Chances are, if you've heard of the company, we're no longer
interested," Vilar continues. Ideally, Amerindo will get involved
with a company about two years before it goes public. "I'd love to
own more Sycamore," Vilar says of the optical-networking
company. "But I bought it initially at $3. [As of September 2000, it
traded at $105.] So what do you do? That's the kind of early-in
result that leaves us scratching our heads."
Vilar expects special access to the top management of all his
holdings. For Vilar, that's one of the fundamentals of successful
trading. It's also one reason he's not terribly happy right now with
another of his early picks, Amazon. "We're pulling back for one
reason — I don't get along with the man at the top," Vilar says.
"When I stay up till late at night in Europe to call him in the
afternoon in Seattle, I expect to get through to him. Now, that may
sound a little precious, but it's not. My clients expect me to have
that kind of access and information. That's what they're trusting
me for."
Still, tech investing is undoubtedly a bumpy road, which is why
Amerindo is sometimes called "one of the most volatile funds in
the game." The Internet B2B and Health & Biotechnology funds
Amerindo launched in May 2000 are up 102 percent and 52
percent, respectively, but the tech fund, after last year's
spectacular result, is down 17.5 percent. Vilar admits he made a
mistake when he bought a large position in eToys and probably
made a mistake in timing when he bought heavily into Healtheon
(though he still likes the prospects of the company, now called
WebMD). Furniture.com has had to delay its public offering, and
Homestore.com has gone from a high of 138 to about 49. But
such is the price of pioneering. When Amerindo organized a new
B2B fund last spring despite the meltdown of the sector on the
Nasdaq, Vilar came under heavy criticism. But Amerindo stepped
in to buy during the downturn and made some
bargain-basement purchases. The day traders' distress was fast
shaping into his new meal ticket.
"Everyone says, 'Oh, you sure had your comeuppance last year,'"
Vilar says. "And I respond, 'Okay, Mr. Peanut-brain, wait and see.
If you knew the things I knew, you'd be having the best year of
your life.'"
Like the Duke of Wellington, who attended a cotillion the night
before decamping to Waterloo, Tanaka and Vilar are as genteel
at play as they are aggressive and daring at work. And in the tech
world, where youth is king and khakis are the dress code, their
manner, habits, and — in Vilar's case — ideals make them
seem like 19th-century holdovers, throwbacks to an era of
gentlemen financiers. An example: The tech market is
notoriously fast-moving, yet Vilar spends more than 100
evenings a year at classical music performances. It would gnaw
at a lesser fund manager's innards to find himself in captive
silence for four hours nearly every other evening, devoid of
phones or ticker updates, but Vilar finds it soothing. True, he will
scrawl notes on his opera program during interludes and turn
the marked-up booklet in to a secretary the next day for
transcription, but his opera evenings are not for work: He rarely
takes clients, preferring to dine and listen alone or with a few
choice friends.
His obsession with music is evident on the walls of his dining
room, where Vilar had artists work for two years to reproduce a
pair of friezes from an Austrian concert hall. He also counts
Placido Domingo among his inner circle. "Placido, his wife, and
I, when we go out, we're like the Three Musketeers," Vilar says.
The great Spanish tenor concurs. "For two or three years, I've
been meeting Alberto socially and talking seriously about opera,"
Domingo says. "He's Cuban, so we also share a love of zarzuela
[Spanish folk opera]. We've had some wonderful meals and talks
together when we meet in Salzburg."
Tanaka, for his part, works not on Wall Street nor the West Coast
but in London, close to his country home in Surrey. Unlike Bill
Gates, for instance, whose ultrawired home is a testament to his
tech-funded fortune, Tanaka spends his off-hours hanging over a
paddock gate, indulging in the ancient sport of kings:
Thoroughbred horse racing. He has such a gentleman's distaste
for glad-handing and publicity that his name is far more likely to
appear in breeding updates in the Racing Post than in the Wall
Street Journal. "I call Gary at least once a day, but we're really
operating in two different worlds," Vilar says. "He watches that
screen eight hours a day. I don't. He deals with trading, portfolio
allocation, which I have nothing to do with."
In return, client relations are left to Vilar, who makes meetings
more palatable by scheduling them to coincide with his
worldwide concert-going jaunts. (In June, for instance, Vilar
caught the Friday afternoon Concorde from New York to London
to meet with clients, then went on to St. Petersburg, Russia, for
the premiere of a new production of War and Peace before jetting
back to work in New York on Monday.)
Vilar also insists on old-world niceties like generosity, gratitude,
and decorum. When I meet with Vilar in Salzburg, the Sicilian
barber he's had for 30 years is at that moment vacationing in
Vilar's Aspen-area home. Vilar has bankrolled the barber's first
homecoming to Sicily as well as the education of his two
daughters and, this fall, the wedding of the coiffeur's eldest
daughter.
On a more spectacular scale, Vilar is almost certainly the world's
most openhanded opera patron. He has donated more than $30
million to New York City's Metropolitan Opera, $20 million to
England's Royal Opera House at Covent Garden, and $15
million to the Vilar Center for the Arts in Colorado, and, more
quietly, has dispersed six-figure gifts to small houses worldwide,
including those in Baden-Baden, Spoleto, and Chicago.
But he demands the proper show of thanks and sees nothing
wrong with having his generosity recognized by affixing his name
to the theaters of opera houses. "Some British journalist was
complaining that he's sick of seeing my name all over Covent
Garden," Vilar says, his normally sedate features twisting in
disgust. "This, this leech on society has no idea that if it weren't
for generosity, most concert halls wouldn't exist. What is wrong
with people that they don't have the manners to simply say thank
you?"
Perhaps part of Vilar's defensiveness about the subject of
gratitude stems from an insecurity many rich philanthropists
harbor: that people like them just for their deep pockets. One
friend of Vilar's seems to subscribe to the theory: "He thinks
these musicians and singers are his closest friends, but many
of them need him because of his money."
Even if it's true, however, with his love of opera so central to his
life, Vilar clearly draws tremendous satisfaction from his
pastime. At breakfast, he's busily calculating when to have lunch
so he can finish in time to make his business calls and still be
tuxedoed on schedule for that evening's concert of Haydn and
Britten symphonies. "It's those tuxedo studs that take so long,"
he complains. "You've picked out what you're wearing, haven't
you?" he asks, turning to his girlfriend. Keep in mind that the
concert, a small one barely mentioned in the Salzburg Festival's
program, is still 10 hours away...>> |
