Growing Rich - Arabictrader.com

KIRK KAZANJIAN
planned to launch called New York Venture. “It was supposed to be
comparable to a small-cap or emerging-growth fund of today,” Davis
says. “The people at Calvin Bullock didn’t want to run it in-house, so
they decided to retain us. Since the fund had only about $1 million
to start, they couldn’t pay us anything. So they agreed to give us 45
percent ownership of the new management company that was being
set up to run the fund. If the venture was successful, we knew that
45 percent would be worth something.”
Calvin Bullock was owned by Sir Hugh Bullock, a grand old gentleman
and Anglophile who was also chairman of the Pilgrim’s Society.
He inherited the firm from his father and eventually sold it to the
Equitable Companies. In 1969, Bullock’s executive vice president in
charge of marketing, Martin Proyect, convinced Bullock that the whole
world was moving toward offering aggressive growth funds, yet the
firm didn’t have one. Bullock didn’t want to put his name on a hot
growth fund. However, he told Proyect if it was necessary to keep the
firm’s broker-dealers happy, he could start one, but only if he found
someone else to run it. That’s when they struck a deal with Davis,
Palmer and Biggs.
As it turned out, New York Venture was the number-one fund in
its rookie year, up 25.3 percent. “We were focused on the speculative,
high-growth stocks,” Davis says. “We owned companies that made
peripheral equipment for computers, such as Memorex and Mohawk
Data, and some nursing homes, such as the predecessor to Humana.
They were the classic go-go stocks of the time.” The following years
were much more shaky. Davis’s high-flying stocks were clipped by
the ensuing bear market, and it took several years for his original
shareholders to break even.
SELLING OUT
By 1978, Davis, Palmer and Biggs had around $400 million under
management. The fund represented only around 15 percent of that.
“We had some very prestigious institutional accounts, such as the
Boy Scouts of America, American Red Cross, Smithsonian Institution,
Dun and Bradstreet, and Rohm and Haas,” he says. “Fiduciary Trust
Company liked our client list and that we were relatively young. They
offered to buy the firm.” It was an offer Davis couldn’t refuse. After
all, he had been through 12 tough years in the market and was
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