Playing to win with the pros

Adviser to top athletes opens exclusive fund to investors

Jun 4, 2001 @ 12:01 am

By Brooke Southall

William L. Roaf, the seven-time Pro Bowl offensive tackle for the New Orleans Saints, plays on the same team as Rickey Henderson, Michael Johnson, Kevin Garnett and Elton Brand.

And now you can too - financially, that is.

Leland H. Faust, chairman of CSI Capital Management in San Francisco, manages money for those star athletes and several others largely through a mutual fund that he created in 1997 to simplify management of their assets.

The move put him on Morningstar Inc.'s radar screen, and he won a five-star rating from the Chicago fund tracker in November. His CSI Equity Fund earned a rare 10% return last year.

Though the fund is still largely just a vehicle for investing the money of athletes - who account for 95% of its assets - Mr. Faust took the first step two weeks ago to attract capital from outside investors.

He listed the fund in Schwab's OneSource program, which allows anyone to purchase it without paying the commission.

Seeing integrity

Since he created the fund, Mr. Faust has quietly come into his own as a financial superstar. But you would never know it.

He remains remarkably low profile despite the Morningstar rating, his association with dozens of top sports stars and his degrees from Harvard Law School and the University of California Berkeley.

In fact, his approach is so low key, he's proving Woody Allen more correct by the moment: 99% of life is just showing up.

It's a style that paid off big-time in 1993, when he caught a flight to Mr. Roaf's Pine Bluff, Ark., home to pitch the virtues of a disciplined, long-term approach to investing.

Mr. Roaf and his mother, a judge who served a term on the Arkansas Supreme Court, appreciated his soft sell. But that's not what stuck in their minds.

Mr. Roaf entrusted millions of dollars in future earnings to Mr. Faust because he and his mother saw integrity in one detail.

"The first thing we noticed was that Leland wore the same sweater two days in a row," Mr. Roaf says. "Leland says there was no reason to pack two sweaters" for the brief trip.

When SmartMoney.com recently featured a short article about Mr. Faust based on his mutual fund's performance, it did not report that he had top athletes as clients. The publication hadn't asked him that information, and he hadn't offered it.

He has no plans to actively market the mutual fund.

Another irony about Mr. Faust is that despite his scholarly credentials, he takes many of his cues on how to approach investments from his athletes.

He believes that overanalysis is the bane of good investing. He foresaw the tech crash and bailed out of such names as Cisco Systems Inc. before it was too late, he says. But he professes to have no magic formula to guide his judgments.

He says his decisions are based on back-of-the envelope calculations.

Juggling act

Mr. Faust's low-key style is not for everyone, including some of the agents whom he confronts to reach out to athletes.

But other agents, such as Pat Dye Jr., a sports lawyer with Profiles Sports Management Inc. in Atlanta, find Mr. Faust to be the consummate financial adviser.

"He seems to have the ability to succeed in getting these athletes to save money, which is 90% of the value. Investing it soundly is just a bonus," says Mr. Dye, son of the former Auburn University football coach. He represents players such as running backs Garrison Hearst of the San Francisco 49ers and James Stewart of the Detroit Lions.

Mr. Faust says he splits his time roughly between managing his portfolio and interacting with clients.

The juggling act is made easier by the fact that he has a staff of 30 people, including four investment professionals.

Even so, the CSI Equity Fund has only about $120 million in assets, and he has only about $350 million under management.

Despite managing funds for dozens of wealthy athletes, Mr. Faust, who went into the financial advisory business to court athletes in 1978, allows that he might have made his business bigger by courting doctors and lawyers. But he felt a strong pull toward athletes.

Mr. Faust was a varsity swimmer at Berkeley, held the record for the Golden Gate Swim race and still completes the frigid Escape from Alcatraz swim every year.

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