A Closer Look: Ken Kam, MBA 1986

KEN KAM LIKES WHAT HE knows. Before he cofounded the Silicon Valley-based Technology Value Fund (TVF), in which he specializes in firms that make medical devices, Kam cofounded Novoste, a cardiovascular catheter firm. It's no coincidence that TVF's top medical holding is also a company that makes cardiovascular catheters.
      Kam's firsthand knowledge has proven lucrative. Begun in May 1994 with $134,000 in investments from family and friends, TVF doubled their money in the first two years. The fund now has more than $210 million in assets under management. In fact, TVF's exceptional returns earned Kam and his partner, Kevin Landis, a computer industry specialist, the designation "best stock fund managers" of 1996 by Business Week. Even taking into account last year's fourth quarter slowdown, TVF ended 1997 as the No. 1 science and technology fund for the three-year period ending December 31, posting an annual average return of 40.18 percent.
      A believer in Peter Lynch's dictum to "invest in what you know," Kam not only knows medical devices, he also knows the doctors who use them. "Our whole investment philosophy rests on the idea that people who make their living in an industry are better judges of what's going on in that industry than someone trying to analyze it from Wall Street," Kam told Barron's last year. "We wanted industry professionals to be able to invest in our fund, giving them an incentive to help us do research, to give us honest feedback."
      At Novoste, Kam developed a national network of cardiologist advisers; they continue to advise him at TVF and are prominent among the fund's investors. He learned to speak their language by conducting clinical trials and observing procedures. "I spent two years training physicians to use my catheter," says Kam. "During that time I observed thousands of angiographies and angioplasties firsthand."
      Recently, Kam and Landis renamed their parent company Firsthand Funds to reflect their investment philosophy. Firsthand now includes three funds: TVF, Landis's new Technology Leaders Fund, and Kam's Medical Specialists Fund--a fund for long-term investors in which Kam focuses on companies that specialize in cardiac treatment, acute care, minimally invasive surgery, and biotech.

--BY JANET ZICH

Photograph By Debra McClinton

To keep on top of the medical devices industry, fund manager Ken Kam observed thousands of surgical procedures.