into names such as Pfizer, Johnson & Johnson, Medtronic, and Amgen.
ADJUSTING HIS GAME
Profit has run into many unexpected turns over the years, and he’s had to respond on the fly. About 10 years ago, when Profit and his initial mutual fund manager, Randell Eley, decided amicably to go their separate ways, Profit retained his role as marketer but was thrown into the role of money manager as well. His first task was to establish a new brand identity distinct from Eley’s frugal investing style. Profit struck something of a compromise, opting to anchor the portfolio in growth stocks that were moderately priced in relationship to the market.
At the same time, he focused his selling efforts on large accounts to gain volume. His aim was to take advantage of economies of scale. Profit reeled in institutional investors to secure the firm’s future. He landed his first subadvisory account with the Chicago outfit Northern Trust, a contract that set him up to invest some $10 million on behalf of the Los Angeles County Employee’s Retirement Fund in March 2000. Just three years later Profit opened accounts to manage retirement plan assets for the Illinois State Board and city of San Francisco employees.
Profit doesn’t like to take full credit for his success. One of a family of five children growing up in Los Angeles, Profit didn’t know his father. He expresses a kind of awed humility when he speaks of his mother, who worked as a surgical assistant, and her sacrifices to make sure he completed college. Once he reached high school, other subtle but solid influences emerged. “They gave me a different perspective of my possibilities,†Profit recalls. “Certainly sports played a major part, and the football story is a nice cocktail conversation, but they helped to guide me to Yale, and that is a credential that speaks volumes. It doesn’t require me to go out and tell my story from scratch again and again.â€
By all accounts, Profit still possesses the quiet demeanor of a cornerback surveying developments on the field. “He’s reserved, he’s low-key, and he’s calm,†says longtime friend Loida Nicolas Lewis, CEO of TLC Beatrice L.L.C. “How many former players at a cocktail party can let even two minutes go by without puffing out their chest and letting everyone know they played?†asks Larry Jennings, another longtime friend and a member of Profit’s board of advisers. “I’m willing to bet there are people who’ve done business with Eugene for years and they still don’t know he was in the league.â€
Profit Finds Value
In addition to assets he oversees for 53 large-scale private clients, Eugene Profit manages a mutual fund called Profit Value (PVALX). Here’s the fund at a glance:
Founded: Oct. 31, 1997
10-Year Total Return: 2.94%
Peer Group’s 10-Year Total Return: -1.84%
Category/Strategy: Invests in large-cap growth companies
Net Asset Value (NAV): $12.32
Morningstar rating: Four stars (out of five)
Minimum investment: $2,500
Top three sectors (% of stocks): 19% information hardware, 21% healthcare, 16% industrial materials
Top five holdings in the fund:
1. Wal-Mart Stores Inc. (WMT)
2. Gilead