Robert G. Kirby, senior partner at Capital Guardian Trust Co., who died late last month at the age of 80, was a superb money manager and one of the industry's most unforgettable characters. He was also a pioneer, although an accidental one in at least one instance.
That was when he ushered a newly established Capital Guardian Trust, Los Angeles, into pension fund management in 1968, a time when most pension funds were still managed by major East Coast trust banks and insurance companies.
Capital Research and Management Co., the mutual fund organization for which Mr. Kirby worked, wanted to enter the investment counseling business serving wealthy individuals. As Mr. Kirby told the story, he thought such clients would be more comfortable with a trust company than with an investment advisory firm, and persuaded Capital Research's management to set up a trust company.
To his surprise, not long after the trust company was established, he received a call from an executive overseeing the General Mills Inc. pension fund asking if Capital Guardian Trust would be interested in managing pension fund assets.
Mr. Kirby of course said yes, and the General Mills pension fund hired Capital Guardian Trust to manage $50 million of its pension assets. "I realized it was a lot easier raising money in $50 million pieces from pension funds than in $5 million pieces from wealthy individuals," Mr. Kirby said in an interview in 1998, and Capital Guardian was soon firmly in the pension management business. Through the years, it grew into one of the most successful managers of U.S. institutional tax-exempt assets, with $134.3 billion under management as of Dec. 31.
Not that he didn't come to regret it at times. Cap Guardian's performance was strong in 1968 and 1969, and the money poured in. But Mr. Kirby avoided the so-called "Nifty Fifty" stocks that dominated the market from 1970 through mid-1973, and Capital Guardian's performance lagged.
However, Mr. Kirby's investment results coming out of the 1973-'74 bear market and through most of the following three decades, were top-tier, except for periods like the Internet bubble.
Bob Kirby was a firm believer in active investment management and did not believe the market is efficient. He looked for the best stocks he could find at prices that made sense, and he bought them. And he did not get carried away by the madness of crowds. In a speech given during the height of the Internet bubble, he declared: "I've always been pretty much a traditional value investor with Warren Buffett as my model — even though Warren Buffett had not yet been invented in 1951" when Mr. Kirby began his career.
Bob Kirby was a risk taker in his personal life. He raced sports cars as a serious hobby for many years, partnering with fellow money manager John Hotchkis, formerly of Hotchkis and Wiley and now with Ramajal LLC, Los Angeles, in such races as the 24 Hours at Le Mans and 24 Hours at Daytona. Concerned that clients might not approve of them racing at Le Mans, the two raced under the names Kilby and Hitchcock.
"That worked fine until Bob was pictured in Business Week wearing his racing suit," said Mr. Hotchkis.
In fact, but for his car-racing hobby, Mr. Kirby might well have spent his investment career at Scudder, Stevens and Clark, New York. His superiors at Scudder frowned on his hobby and asked him to choose between it and his job. Mr. Kirby chose the hobby, left Scudder and joined Capital Research and Management in 1965.
Mr. Kirby finally quit racing formally after a mild stroke five years ago, but each year he rented a racetrack near Bakersfield, Calif., and invited his friends to bring their sports cars there and race them.
"He loved racing cars and he loved managing money," said Mr. Hotchkis. "He died at his desk, and that's what he would have wanted."
