PITTSBURGH - Not many managers can claim to have been in the business since high school, but Mark D. Lay is one of them.
Mr. Lay started as an intern at Salomon Brothers Inc., New York, where he said he worked in "every department - from trading to operations."
Now chairman, co-chief executive officer and chief investment strategist of MDL Capital Management Inc., Pittsburgh, Mr. Lay grew up in the small steel town of Aliquippa, Pa., where his father worked in the steel mills and his mother was a school secretary.
His father died when Mr. Lay was a high school senior; he credits his mother "with keeping me focused on school and on work."
Unlike many young would-be portfolio managers, Mr. Lay set his sights from the outset on bonds, eschewing the sexier image of stocks.
"I've always loved the economics of bonds, that part of analyzing fixed income, I'm really kind of a propeller head," he said.
He paid his dues trading foreign currencies at Citicorp, New York, and as a salesman for Dean Witter Reynolds Inc., Pittsburgh, where he built up relationships with many institutional clients.
Those big pension clients encouraged Mr. Lay to start his own company nine years ago and gave him his first assets to manage in broad market and intermediate bond strategies. Boeing Co., Chicago, for example, has been a long-term client and recently awarded MDL an additional $300 million for core bond management.
The firm, which is 68% minority- and woman-owned, has outperformed its benchmark for its broad market strategy for the fourth quarter of 2001, as well as for the year, three years and five years ended Dec. 31.
MDL began 2001 with $2 billion and ended the year with $3.2 billion under management; it has gained $500 million in net new assets so far this year. Mr. Lay said he anticipates ending the year with more than $6 billion in total assets. New clients include: the $22 billion Teachers' Retirement System of Illinois, Springfield; the $43 million reserve fund of the National Collegiate Athletic Association, Indianapolis; the $140 million players' defined benefit plan for the National Basketball Association, Secaucus, N.J.; and the $436 million combined defined benefit plans of Nissan North America Inc., Los Angeles, and Nissan North America Manufacturing, Smyrna, Tenn.
"There's no real secret to our success. People buy performance and buy (the skills of) people who have an opinion and think about process. We remain very focused on process and client assets," Mr. Lay said.
The focus on process permits Mr. Lay to "spend about 60% of my time in front of my computer screen being a prop head, reading Bloomberg, 35% of my time marketing and 5% putting out all the other fires," he said.
Hiring Marc Sydnor ("another propeller head") who markets to the consulting community, and Daryl Mendhenhall, an institutional marketer, has left Mr. Lay freer to concentrate on "managing money. It's my first love. I love this business. I joke with clients that I'd do it even if I weren't paid."
A big part of MDL's corporate culture involves giving back to the African-American community.
The firm mentors its own annual crop of interns, and participates in a mentoring program with disadvantaged youth in Pittsburgh. MDL also participates in the Black MBA program through the Western Pennsylvania chapter and brings teens from inner city schools through MDL's offices to give them a sampling of life as a money manager.
A summer program is being developed to match MDL portfolio managers with young people in the Virgin Islands for financial education. The government of the Virgin Islands is another long-term MDL client.
"We like to challenge our clients to give something back to the community and it's something we try to do ourselves as often as we can, wherever we have clients," Mr. Lay said.