JANE MCCART: ON THE PROWL FOR JUNK THAT’S LESS RISKY

Jane McCart knows a thing or two about junk — bonds, that is.

So, it’s not surprising that Northern Trust Corp. recently lured the 43-year-old portfolio manager from Stein Roe & Farnham Inc. to launch two junk bond mutual funds for its global investments group.

What’s surprising is that the conservative Chicago bank would invest heavily in such bonds in the first place.

“We feel that this is really a legitimate asset class that can enhance client returns, if you use it prudently,” responds Ms. McCart, now a Northern Trust senior vice-president.

The fixed-income and municipal bond portfolios Ms. McCart has been building since early January are a far cry from the highly speculative issues that fueled the leveraged buyout boom — and bust — of the 1980s.

Rather, Ms. McCart and a team of five analysts are snapping up corporate debt and project-finance bonds issued by hospitals and others — which, despite their subinvestment-grade credit ratings, aren’t likely to default on payments. Northern’s goal: to have $1 billion in assets in the funds within a year.

Before joining the bank in November, Ms. McCart honed her expertise running two funds for Chicago money manager Stein Roe: a $350-million high-yield municipal fund that garnered a five-star rating from Chicago’s Morningstar Inc., and a $550-million managed municipal fund that earned a four-star rating.

“Jane obviously did a very good job while she was here,” says Thomas Butch, president of Stein Roe Mutual Funds. “Based on her skill level and work ethic and her knowledge of the market . . . she has a good foundation for success (at Northern Trust).”

Crain News Service