The 20 Rising Stars of Mutual Funds 2008 - (Page 23) At JPMorgan, Todd led a due diligence analysis that resulted in the implementation of a new software platform to improve financial reporting. “From a control perspective, reporting due diligence wasn’t as tight as it needed to be,” he said, adding that the firm uses the platform, from Confluence Technologies, to do its annual and semi-annual reports and Securities and Exchange Commission filings. Todd plans to do more in the fund industry going forward. “In 10 years, I see myself as an assistant treasurer or treasurer at a fund complex,” he said, noting that he enjoys working on the financial reporting side and managing the technology aspect. “You have to have an understanding of what those service providers are doing for you,” he added, crediting Seyboth as teaching him how to be a good technology manager. Like the major changes that occurred with financial reporting following the SarbanesOxley Act, Todd sees regulation playing a bigger hand in the industry, particularly in how funds invest. “I see a less is more approach,” he said. As a result of ‘regulatory fatigue,’ the SEC may back off somewhat when it comes to rule-making or at least look more closely at how more requirements impact shareholders, he predicted, adding that the emphasis will continue toward more meaningful and more consistent disclosure. 19. ALEJANDRO VALLECILLO Vallecillo is a senior equity portfolio manager at Allegiant Asset Management and oversees the Allegiant Mid-Cap Value Fund, which has assets of about $400 million. The fund has grown from $50 million when he and his partner, Michael Santelli, first took it over after joining the firm in 1996 and has been beating its benchmark while other mid-cap value funds struggle. Indeed, the two managers were the subject of a Barron’s feature article highlighting their ability to find ‘value in the wreckage’ of the 2007 mortgage meltdown. Prior to joining Allegiant, Vallecillo was a corporate bond and structured fixed-income trader with Merrill Lynch. Vallecillo, a chartered financial analyst, said the challenge for him is executing the investment process, in which he incorporates four elements. The first is a quantitative ranking to sort out stocks that he and Santelli feel are most stable in terms of valuation. Second is an analysis of companies that score highly with returns. Next is managing risk by keeping the portfolio diversified. Finally, there is a ‘sell discipline’ of reviewing how a change in a company’s fundamentals may impact its stock. Vallecillo said he is most proud of how the fund’s assets under management have grown and wants to continue growing the company going forward. For the industry, he sees a greater emphasis on risk-adjusted returns, which he believes will be needed to sustain growth. In addition, firms will need to go against conventional wis- 19. ALEJANDRO VALLECILLO Senior Equity Portfolio Manager Allegiant Asset Management, Cleveland Age: 39 Education: George Mason University (B.A.); University of Michigan (M.B.A.) Mentors: Warren Buffett, Chairman and CEO, Berkshire Hathaway; Donald Ross, Former Chief Investment Officer, Allegiant Asset Management JANUARY 2008 MUTUAL FUND RISING STARS 23
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