CHICAGO -- Veteran stock picker Ralph Wanger has hired his legal adviser, Howard Kastel, to serve as president and CEO of Wanger Asset Management LP.
Mr. Kastel -- a former partner at the Chicago law firm McDermott Will & Emery -- has remained a close counselor to Mr. Wanger since helping negotiate the 1992 split of the company's flagship Acorn Fund from Chicago-based money manager Harris Associates LP. Wanger Asset Management manages $5.5 billion in three mutual funds and $390 million in variable annuity, insurance and pension plans.
More recently, the high-energy lawyer -- he often bicycles to work -- played a key role in helping win shareholder approval of a new advisory agreement with the $3.69 billion Acorn Fund. The agreement hikes the management fee nearly 57%, and could raise this year's advisory fee by $7.4 million to $20.4 million, based on the fund's assets under management at the end of 1997.
Mr. Kastel said some of that increase will go toward new hires, raises for analysts and other expenses. In bringing on Mr. Kastel, Mr. Wanger is giving up his business management duties to focus on running the Acorn fund and on nursing the firm's analysts.
"Howard will take time and responsibility off my shoulders," said Mr. Wanger. "I'm going to be more involved on a day-to-day basis in the reorganizing of the Acorn portfolio."
Although Mr. Kastel has spent much of his career arguing complex accounting liability and insurance cases, he also served as an adviser to law, accounting and consulting firms on their own internal challenges.
Since 1972, for example, Mr. Kastel has advised a succession of executive partners at Chicago-based Grant Thornton LLP, the country's seventh-largest accounting firm.
"He's someone who has spent much of his practice dealing in especially thorny and difficult situations," said Louis Rosen, senior corporate lawyer at Lord Bissell & Brook in Chicago.
"I have just enough gray hair for people to listen to me," said Mr. Kastel. "The biggest key is to free up Ralph on issues not tied to the investment portfolio."
One significant internal issue that preoccupied the management company last year was a reorganization of its ownership structure to include additional portfolio managers and analysts.
Under the plan approved in December, Mr. Wanger and research director Charles McQuaid over time will reduce their combined ownership of the management company from 80% or more to about 60%. Although Mr. Wanger continues as the Acorn funds' chief strategist and retains the largest stake in the company, the new plan also increases the voting rights of his partners.
With the ownership issue resolved, Mr. Wanger and his management team are exploring the possibility of expanding their stable of mutual funds, which includes Acorn, Acorn International and Acorn USA.