For Subscribers

Get the complete article now!

Five Money Managers examine portfolio management strategies in this 24-page Investing Strategies Report from The Wall Street Transcript, available at (212/952-7433) or www.twst.com.

TWST: Can you give us an overview of your firm and your responsibilities there?

Mr. Knight: We were originally called Allied Investment Advisors and were part of Allfirst Bank, which, in turn, was owned by Allied Irish Bank. We have about $10-$11 billion under management, covering all asset classes. We also manage a group of mutual funds called the Ark Funds. Several months ago Allied Irish Bank sold approximately 78% of Allfirst to M&T Bank in Buffalo, and on August 15, Allied Investment Advisors became MTB Investment Advisors. We will continue to do the same thing we did before but with a different name and more employees. The Ark family of funds is being merged with M&T’s Funds, which were called the Vision Funds. The new name for the combined fund family is MTB Funds.

TWST: Is there an overall investment philosophy for the two firms?

Mr. Knight: We’re concerned with risk levels, but there are probably going to be about 30 different funds, so each fund is going to be different depending on the fund’s objective. The investment philosophy for MTB Investment Advisors model portfolio is a growth at a reasonable price strategy or GARP approach. This is backed by a rigorous quantitative process and individual stock analysis. Again, within the overall process, you’re going to have different types of funds with different styles such as aggressive growth and value. My primary job is to run the firm’s small cap product, which consists of several mutual funds and some individual accounts. This particular style is much more of an aggressive growth momentum approach, so it’s a little bit more active than the GARP style. We look for above average revenue growth, earnings momentum, high return on equity and very low debt levels, not more than 20% of a firm’s balance sheet for example.

TWST: Tell us about some of the companies in health care, telecom, IT and homebuilding.

Mr. Knight: We have shares in SanDisk (SNDK). It’s an electronic component company that makes flash memory. This has done very well, and we think there’s going to be a real jump in revenue, maybe on the order of 75% next year. For the year ending 12/04, they could earn maybe $1.75. The stock’s had a move here and is really getting kind of high, but its long-term debt is quite low at 17% of the balance sheet. This is an example of the kind of revenue growth we want to see, but again the shares may be overpriced.

TWST: What about acquisitions? A lot of the smaller companies are acquired. Is that ever an investment criterion?

Mr. Knight: Not really. I think that we’re more concerned with the ability of the company to move forward and demonstrate revenue and earnings growth. Obviously, it’s something that we would look at. If we’re in an industry such as the wireless communication industry or perhaps the homebuilders, we would take that into consideration, but that’s not the major criterion for our purchase.

This Invesing Strategies Report includes:

1) Outlook for International Equity Markets - Peter Harrison, Managing Director for JPMorgan Fleming Asset Management, examines portfolio management strategies in this timely and deeply informative 4,500-word interview from The Wall Street Transcript.

2) Investing in Small Cap Growth Stocks - H. Giles Knight, a Managing Director at MTB Investment Advisors, examines portfolio management strategies in this timely and deeply informative 4,400-word interview from The Wall Street Transcript.

3) Active Bond Management - Richard J. Huxley, head of the Clover Capital Management and Joseph P. Cerqua, a Portfolio Manager & Analyst for Clover Capital Management, examine portfolio management strategies in this timely and deeply informative 3,700-word interview from The Wall Street Transcript.

4) Managing Private Assets & Trust Services - Stephen J. Cohen, the President & Founder of Private Asset Management, examines portfolio management strategies in this timely and deeply informative 4,700-word interview from The Wall Street Transcript.