May 2005

Who's in the News

MBA Finds Reel Love

A banker from Singapore, Li-Anne Huang, MBA ’03, went to Merrill Lynch in New York, where she worked on media company mergers and fell in love with film. Huang studied the business of filmmaking at the Business School before signing on as an assistant to director Sydney Pollack, who urged her to start small, directing her own films. She now has eight shorts, including Singapore Girl, which was partly financed with a grant from the Singapore Film Commission.

Part of the appeal of directing, she told the Straits Times, is that films communicate across cultures more than other media. “Because of the worldwide distribution, people from all parts of the world have access to the same films.”

Web Log Eggnog

Kids do the darndest things, Art Linkletter observed, and Tom and Alice Bauer of Carmichael, Calif., have reason to agree: One of their six is giving away the family jewels.

Elise Bauer, MBA ’88, persuaded her parents to share their time-honored recipes, including oxtail stew, with strangers via her web log. “I come from an age when you held onto your special things, but Elise is very persuasive,” Alice Bauer told the Sacramento Bee.

The younger Bauer is impressed with blogging. “This is a real community. We read each other’s blogs and try each other’s recipes,” she says. In a year’s time, her site, www.elise.com, has gone from 100 visitors a day to 3,000.

And in the first Food Blog Awards sponsored by a Seattle website known as Accidental Hedonist, hers was one of four nominees for the best recipe blog, losing out to a site named Chocolate & Zucchini.

When the Saints Go Floating In

Among Greek gods and goddesses who attend Mardi Gras, none come closer to the perfection of the figures on the Sistine Chapel ceiling than those sculpted from plywood and foam by the merry crew at Royal Artists, the year-round float production company owned by Herbert Jahncke, MBA ’67.

Now a bearded, suspender-wearing employer of 15 New Orleans artists, Jahncke was an executive in the family concrete business when he joined martini-fueled brainstorming sessions with a legendary carnival float designer and got hooked on restoring 19th-century grandeur to rolling theater, according to the art critic of the Times-Picayune.

A stickler for historical accuracy, Jahncke sometimes gets into disputes with clients who want to put more than the traditional 14 riders on floats. Said one client willing to pay $35,000 for Jahncke’s work: “He is a very dedicated and creative individual.”

Managed 401(k)s Wave of the Future

MBAs may be an exception, but most American workers don’t feel they have the time, expertise, or inclination to invest their retirement funds wisely. That’s why “the vast majority of 401(k) plans are not working,” Jeff Maggioncalda, president of Financial Engines, said at a November conference on pension investing in San Francisco. His remarks were reported by Crain Communications.

Maggioncalda, MBA ’96, heads the Palo Alto–based investment advisory firm that collaborates with Vanguard and other 401(k) providers to offer some workers the option of purchasing professional money management for their employer-based retirement accounts. (Financial Engines was founded by Bill Sharpe, Nobel laureate and professor emeritus at the Business School.)

Managed 401(k) accounts are the wave of the future, Maggioncalda told the conference. Ann Combs, assistant U.S. secretary of labor, added that the department supports making managed accounts the default option for participants enrolled in 401(k) plans.

Palestinian Reformer

Dr. Mustafa Barghouthi, Sloan ’95, finished second in the Palestinian presidential election to replace the late Yasser Arafat. A physician and human rights activist, Barghouthi has been “a consistent advocate of ending the Israeli occupation by non-violent means,” according to the Straits Times. He garnered 20 percent of the January vote in the seven-candidate race and promised that his 3-year-old National Initiative political movement would field multiple candidates for the parliamentary elections in July. Fatah, the dominant Palestinian political party, needs an opposition committed to the democratic process, he said. Reuters said, “Barghouthi, 50, represented a younger Palestinian generation keen for an end to one-man rule, corruption, and chaos that was rampant in Arafat’s last years.”

Hedge Fund King Closes Shop

He “rode the economic roller coaster in the front car” to amass a fortune as a hedge fund manager, Fortune magazine says, but now Larry Bowman, MBA ’87, is turning his money over to other managers. “Investing in public tech companies is a young person’s game,” says Bowman, who set up his Silicon Valley shop in 1995, earning 92 percent the first year and 71 percent the next.

Bowman got caught on the short side of a post-9/11 market rally in 2001, however, and ended up down 36 percent. He decided to return $4 billion to investors and later quit managing his own investments also. “After 17 years of 24 hours a day, the pace is better now,” he says. “I learned that volatility is just a euphemism for losing money.”

Calling All Countries

Next time you are trying to guess the location of a telephone sales or customer-service agent, consider Nairobi. KenCall, Kenya’s first call center employing about 200 mostly college-educated Kenyans, opened in November. It is the dream of Nicholas Nesbitt, MBA ’91, who returned to Kenya after the nation underwent a promising political transition in late 2002. His challenges included getting a costly satellite hookup and generator system, but, he said, he was pleased not to have doled out any bribes—“not even so much as a cup of coffee.”

Not long after the opening, international media outlets came to investigate. “I guess it is so rare to hear positive stories coming out of Africa that they all wanted to get their angle,” Nesbitt wrote to his Business School class secretary, following the appearance of stories in The Nation, the New York Times, and the International Herald Tribune.

India call centers make headlines, but Pakistan is also a great place for a teleservices business, according to Zia Chishti, MBA ’97, the founder and chief executive of the Resource Group, a 3-year-old teleservices company that operates in Lahore and Karachi, Pakistan. Chishti’s company acquired Pennsylvania-based Telespectrum last October, according to Dow Jones News Service. “We now have over $130 million in revenues and over 3,000 people,” Chishti said. At an industry conference in Islamabad, he said a skilled labor force and a helpful government were driving Pakistan’s information technology growth, reported Pakistan Press International.

Alumni to Know

Faculty

Newsmakers

From Virtual to Real Estate

Charles Brewer, MBA ’87, has left virtual turf for bricks-and-mortar reality. The creator of Mindspring, an Internet service provider that was merged into Earthlink, bought 28 acres of former industrial land near downtown Atlanta, where he is applying concepts from “new urbanism” that are supposed to foster a sense of community and reduce driving.

“I had always thought of developers as destroyers,” he told the New York Times. “I just don’t like a lot of what’s being built—garage doors facing the streets, walled-off subdivisions, and commercial pods with big parking lots.” Detached homes and row houses in his Glenwood Park nestle beside shops and small office buildings. They were selling last winter for $150,000 to $700,000.

Chief Swoosh Benches Himself

Brilliant managers don’t just innovate; they hunker down into “mundane details” when necessary, BusinessWeek said in an article about Phil Knight, MBA ’62, who announced in November that he was stepping down as CEO after 40 years at the helm of Nike. Retaining his title as chairman, the largest Nike shareholder said he wanted to give the new CEO, William Perez, time to “do nothing but learn.”

Knight “forever changed the rules of sports marketing with huge endorsement contracts and in-your-face advertising” during the 1980s and 1990s, BusinessWeek said, but then changed his style to “transform a volatile, fad-driven marketing and design icon into a more shareholder-friendly company.”

Picking Investments by Picking Brains

A novel business model for picking investment fund managers is garnering attention because of its results. Money-management veteran Ken Kam, MBA ’86, created the Marketocracy Masters 100 (MOFQX), a portfolio whose picks are made by ordinary people who seem to have a knack for producing above-average returns. The $62 million fund is up 8 percent on average annually over three years, versus 3 percent for the S&P 500, Fortune magazine reported.

About 70,000 investors run hypothetical portfolios on Kam’s website. Each month, software picks the 100 best and then models the mutual fund after their holdings, weighted by performance and consistency.

Having worked in the medical field earlier, Kam says, he realized that people who have experience in a given industry might be better at picking investments than professional fund managers. His system tries to capture such varied expertise.