AT THE BELL

Foster Friess: Nobody’s perfect

Brandywine Fund manager Foster Friess explained the 70% cash position he took when the Asian crisis hit last fall and his subsequent reinvestment in stocks Friday before a largely sympathetic audience at Morningstar Inc.’s annual conference in Chicago.

“We are human beings. We make mistakes,” he said.

He acknowledged he had underestimated the impact of foreign money pouring into the biggest U.S. stocks, a factor he said was key in the Standard & Poor’s 500 stock index’s strong first-quarter performance. But he said he wouldn’t change his buy discipline, which is bottom-up and focused on top growers that can be found at a reasonable price and are beating expectations. A consistent top performer until the move into cash, the $7.4 billion Brandywine Fund suffered a 1% loss in the five months ending May 31 and was ranked nearly last among funds in Morningstar’s mid-cap growth category.

State Street faces Pa. fate

Confronted with the likely prospect that it will lose a plum contract to provide custody services for Pennsylvania’s $64 billion public employee pension plan, State Street Corp. is making plans to close its 26-employee office in Harrisburg. Representatives of the $458-billion bank’s human resources department recently visited the 4-year-old office and presented employees with potential severance packages. A spokeswoman for Boston-based State Street confirmed the bank’s intentions to close the office if the contract is ended. Last month, a state court ruled that State Street could not enforce a hotly contested 5-year contract extension.

CFO flees First Union

Michael Holcomb, First Union Capital Management’s former chief financial officer, has decided to leave rather than report to his replacement, Thomas Pindelski. A spokeswoman for the nation’s sixth-largest bank confirmed that Mr. Holcomb is leaving after eight years. He had no comment on his plans. Charlotte, N.C.-based First Union, whose mutual fund assets swelled 50% to $48 billion during the 12 months ended May 31, announced last week that it had hired Mr. Pindelski from Nicholas-Applegate Capital Management LP, where he was a partner and chief financial officer. His departure from the San Diego company was the latest in a shakeup of the $2.5 billion Nicholas-Applegate Mutual Funds that began early this year with the resignation of John Wylie, its president.

On adviser-share bandwagon

Bankers Trust Co. next month will introduce an adviser share class for its International Equity Fund, becoming the latest money manager to offer preferential pricing to advisers willing to meet a hefty minimum: $250 million at an expense ratio of 1.25%, 25 basis points less than the fees retail investors pay. Assets in the fund are $1.2 billion, with another $600 million in a lower-priced version for institutional investors.

Another SEC defection

Howard Kramer, senior associate director of the Securities and Exchange Commission’s Division of Market Regulation, will leave the agency in late July to become a partner with the Washington office of the Schiff Hardin & Waite law firm. Mr. Kramer, 43, joined the agency in 1981.

Investment in good works

The Calvert Social Investment Foundation, a non-profit charitable foundation affiliated with the Calvert Group of mutual funds, and Grameen Foundation USA launched an investment program on Friday that allows individuals to invest, not donate, their money to economic development projects and micro-loan programs in Bangladesh. The program has a minimum investment of $1,000 and investors earn up to 3%.

ETC.: Good news on Roths

Retirees will be able to convert traditional individual retirement plans to Roth IRAs more easily under a provision included in legislation aimed at reforming the Internal Revenue Service. The bill includes a provision stipulating that distributions from traditional IRAs will not be counted as income for the purpose of determining whether account holders are eligible to convert to Roth IRAs. . . The House Commerce Committee approved a bill requiring that class action suits involving securities traded nationwide be filed in federal rather than state courts. President Clinton favors the bill, passed last month by the Senate. It must also clear the Judiciary Committee before the House acts on it.

Correction

A June 1 article on Countrywide Investments mistated the name of the company’s president and CEO. It is Robert Leshner.

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