Milwaukee on the Radar for Mutual Funds

Dec 17, 2012 by

In a city famous for the Bucks and its breweries, Milwaukee has recently been on the radar for something rather surprising: mutual funds. In the past ten years, eight mutual funds outperformed at least 94 percent of their rivals in the Milwaukee region. Compare that to Chicago, where just nine funds earned similar statistics though the region has five times as many funds.

Why Milwaukee—a region far removed from Wall Street or any other major financial hub? Several analysts cite the city’s lack of proximity to major financial capitals as an advantage, enabling the region to be less directly affected by trends, and better able to reason independently.

“I don’t have any neighbors who run hedge funds,” says Andrew Stephens. “No one is constantly talking stocks to me. I am happy here in my ignorance.” Stephen’s $6.5 billion Artisan Mid Cap Fund outperformed 99 percent of rivals since its inception in 1997.

Albert Nicholas is perhaps one of the most well-respected money managers in Milwaukee. Since 1969, the University of Wisconsin alum has run the Nicholas Fund, worth $1.7 billion. Bill Nasgovitz, founder of Heartland Advisors, and Ted Kellner, founder of FMI, also got their start the University of Wisconsin. Their mutual funds had a 151 percent and 134 percent 10-year total return on investment, respectively.

The strength of mutual funds in Milwaukee is also due, in part, to mutual fund owners’ close ties with the university. The school has a strong applied security analysis program for graduates, and allows master’s students to manage the $53 million endowment and donation fund, providing students with real world experience. Many of these students work for mutual fund firms upon graduation, and some may eventually start their own funds.

Together, Milwaukee mutual fund managers look after 61 funds worth roughly $57 billion.

Source: Businessweek

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