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Three money managers examine portfolio management strategies in the latest Issue of The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info585.htm.

TWST: Give us a brief overview of Wells Capital Management and the International Equity portfolio that you run.

Ms. Yih: In general, Cynthia and I focus on large to medium-sized companies of high quality that offer solid growth at good valuations. It’s a fairly simple but powerful philosophy. We invest on both the value and growth ends of the spectrum, looking for investments that we can live with over a long time horizon.

TWST: What is appealing to you in the European area?

Ms. Yih: An example of what we own there is a company called Capita (London:CPI.L), which is an outsourcing company that benefits from the UK government’s efforts to outsource backoffice operations and record keeping. Capita has been winning all of the major contracts because, basically, they are the only player in town that has structured themselves to be able to handle these specific projects. So it’s taking advantage of that whole global outsourcing trend that we talked about, although we do see signs of it happening even at the government levels in the UK. Capita is a stock that trades at a premium in terms of valuation, but we feel the premium is justified as it has hardly any competition in terms of their business mix. The valuation has fluctuated for this company over the past five years between a p/e of 110 times and 31 times. The p/e is currently around 34 times next year’s earnings. Management has given guidance for growth at over 20% organic growth and about 27% overall growth for 2002. When we bought this stock, we knew management was pretty conservative in their estimates. Just yesterday, they increased targets by about 1%.

TWST: How is the euro working out?

Ms. Yih: The euro has been working quite well. It slightly increased inflation because retailers rounded up prices of products when they converted to the euro. Other than that, the whole conversion process has gone very smoothly. In addition, the recent appreciation of the euro should help keep inflation in check.

TWST: What is your sell discipline?

Ms. Yih: There are three instances when we institute a sell. We have a very systematic process by which we analyze stocks. We rank stocks in five areas: valuation, growth, risk, management and sentiment. We will rank a stock on each of these factors on a scale of one to five, with five being the best score. We then add up the rankings for the five factors and divide by five to come up with a composite score. We will consider buying a stock if the composite score is 3.4 or above. On the flip side, if a stock has a composite score that falls to three or below, that triggers an automatic sell in the portfolio. As we stated in response to your very first question at the beginning of this interview, our philosophy is to focus on quality companies at good valuations. This philosophy is reflected in our sell discipline, which dictates that we will sell a stock if the individual ranking for management, valuation or risk falls to a two or less. We will also sell a stock from the portfolio if we find another stock that is a more compelling opportunity based on its ranking and how it fits into the portfolio.

TWST: What would you say are the biggest challenges that you are grappling with at this time?

Ms. Yih: I think the biggest challenge we are grappling with is that while we believe the underpinnings for a global economic recovery are in place, there is still a lot of uncertainty in the markets with regard to the timing and the magnitude of the recovery. So I would say the biggest challenge is whether the economic recovery really comes through or we go into a double-dip recession as Morgan Stanley’s Stephen Roach predicts.

This special report includes:

1) Cynthia A. Tusan, a Managing Director for Wells Capital Management, examines portfolio management strategies in this timely and deeply informative 4,500-word interview from The Wall Street Transcript.

2) Sabrina Yih, a Managing Director at Wells Capital Managemen, examines portfolio management strategies in this timely and deeply informative 4,500-word interview from The Wall Street Transcript.

3) Brian S. Sommers, a Director of Equitites for RRZ Investment Management Inc., examines portfolio management strategies in this timely and deeply informative 2,400-word interview from The Wall Street Transcript.

4) Mark Davidson, the Investment Officer for Fiduciary Services Corporation, examines portfolio management strategies in this timely and deeply informative 4,000-word interview from The Wall Street Transcript.