Anthony Gray, one of the nation's premier money managers, is now presiding over a new family of mutual funds from his perch at Florida's SunTrust Banks Inc.
Introduced in mid-July, the STI Classic Family of Funds includes a capital growth fund, two bond funds, and three money market funds. The growth fund was launched with about $15 million of assets, and is expected to grow to $500 million within two years, Mr. Gray said.
He said retail investors have a strong need for the expertise of managers who usually devote themselves to institutional accounts.
"There's an enormous amount of cash looking for a home," said Mr. Gray, who is president of SunBank Capital Management and investment adviser for the capital growth fund. SunBank Capital has $12 billion in assets under discretionary management.
Mr. Gray's principal claim to fame is his management of a corporate equity fund that has returned a stellar 25.5% over the 10 years ended in December. That was good enough for The Wall Street Journal to say last year: "Peter Lynch was good. Anthony R. Gray is better."
Mr. Lynch is the superstar manager who piloted Fidelity's Magellan Fund into the investment-return stratosphere.
Mr. Gray not only works for a bank, but also invests in the financial world. Among the holdings he is accumulating in the capital growth fund are Bank of New York Co., Comerica Inc., First Union Corp., and National City Corp.
Among his largest nonfinancial holdings are such stalwarts as Wal-Mart Stores Inc., Merck & Co., Johhnson & Johnson, and the Big Three auto companies.
Mr. Gray admits that SunTrust is something of a late-comer in introducing a family of funds for retail investors who like to shift assets.
Given the rapid runoff of bank deposits into mutual funds over the past 18 months, the bank would have done better to have launched the STI Classic Family earlier, he said.
Nevertheless, bank analysts applauded SunTrust's move.
"These mutual funds will be a real home run for STI," Brown Brothers Harriman analyst Nancy Bush wrote in a recent report, "although we will not likely see a significant contribution to the bottom line for two years or so."