Morningstar Advisor - Winter 2008 - (Page 66) Undiscovered Managers The Secret’s Out By Laura Lallos Investors are finding their way to John Keeley’s funds thanks to a unique strategy and great returns. In the bustling south end of the Loop, tucked behind the Chicago Board of Trade and across the street from the Chicago Board Options Exchange, is the considerably more sedate office of Keeley Asset Management Corp. (KAMCO). No receptionist waits to greet visitors to the modest workspace in an aging high rise. There is one sign, however, that this is the domain of a maverick: The walls are lined with the cowboy-themed artwork that manager John Keeley handpicks on vacations out West. Keeley runs a low-turnover portfolio of low-profile smaller-cap names, one third of which are not even included in an index when he first buys them. “If there are 15 research reports in the file, that’s a sucker’s bet,” he asserts. Keeley unearths opportunities arising from corporate restructurings, such as spin-offs—creating companies that often haven’t made it onto an index yet—and bankruptcies, which cause companies to be booted off indexes. Keeley may be off the beaten track, but “smart people have found us,” laughs son Mark Keeley, who spearheads the company’s first serious attempt to sell itself to advisors and the 401(k) market. Robert Stone, president of Telemus 66 Morningstar Advisor Winter 2008
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