Ex-Vice Fund manager plans gaming portfolio
By Jeff Benjamin January 16, 2006
<SCRIPT language=Javascript src="/javascripts/crownpeak.js" type=text/javascript></SCRIPT>Dan Ahrens has found his way back into the business of money management, following his September resignation from Mutuals.com Inc. in Dallas, where he managed the $44 million Vice Fund (VICEX) to an 18.7% annualized return over three years.
Mr. Ahrens, who wrote the book "Investing in Vice: The Recession-Proof Portfolio of Booze, Bets, Bombs and Butts" (St. Martin's Press, 2004), plans to pick up where he left off with a new fund that taps into the popularity of gambling.<SCRIPT language=JavaScript>OAS_RICH("Middle");</SCRIPT><SCRIPT language=JavaScript><!--var plugin = 0;if (navigator.mimeTypes && navigator.mimeTypes["application/x-shockwave-flash"] && navigator.mimeTypes["application/x-shockwave-flash"].enabledPlugin){if (navigator.plugins && navigator.plugins["Shockwave Flash"])plugin = 1;}else if (navigator.userAgent && navigator.userAgent.indexOf("MSIE")>=0&& (navigator.userAgent.indexOf("Windows 95")>=0 || navigator.userAgent.indexOf("Windows 98")>=0 || navigator.userAgent.indexOf("Windows NT")>=0)) {document.write('<SCRIPT LANGUAGE=VBScript>\n');document.write('on error resume next \n');document.write('plugin = ( IsObject(CreateObject("ShockwaveFlash.ShockwaveFlash.3")))\n');document.write('if ( plugin <= 0 ) then plugin = ( IsObject(CreateObject("ShockwaveFlash.ShockwaveFlash.4")))\n');document.write('if ( plugin <= 0 ) then plugin = ( IsObject(CreateObject("ShockwaveFlash.ShockwaveFlash.5")))\n');document.write('if ( plugin <= 0 ) then plugin = ( IsObject(CreateObject("ShockwaveFlash.ShockwaveFlash.6")))\n');document.write('</SCRIPT> \n');}if ( plugin ){document.write('<OBJECT classid="clsid
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Through his new company, Ahrens Advisors LP in Dallas, he filed a prospectus with the Securities and Exchange Commission on Jan. 6 for the Gaming and Casino Fund.
Unlike the more diversified Vice Fund, which Mr. Ahrens helped launch in September 2002, the new fund will be designed as more of a pure-play gaming and casino strategy.
According to the prospectus, he will invest at least 80% of the fund's assets in gaming and casino companies, as well as the bustling video game industry.
The new fund, while still fitting into the category of so-called sin stocks, will be distinct from the Vice Fund in that it will have limited exposure to the strength of the alcohol and tobacco industries.
Under Mr. Ahrens' management, the Vice Fund maintained significant positions in both tobacco giant Altria Group Inc. (MO) of New York and St. Louis-based beer maker Anheuser-Busch Cos. Inc. (BUD).
With the flexibility to allocate 20% of the fund outside the gaming and casino industries, he still will give investors exposure to areas such as alcohol and tobacco, but he doesn't apologize for offering a narrow investment focus.
"A lot of investors who had contact with me while I was managing the Vice Fund said they were looking for this kind of pure play in gaming and casino stocks," Mr. Ahrens said.
When asked whether he felt a required 80% exposure to gaming and casino stocks could become too restrictive, he said he considered it a starting point and that 100% exposure to those two industries isn't out of the question.
"The gambling industry is a booming market, and I think gaming and casinos will always be strong areas," Mr. Ahrens said. "Gaming has become ingrained in our society, and it's not going away."
He compared his concentrated strategy to other sector-specific mutual funds.
"I don't see this fund as being any more unusual than the first tech fund or the first health-care fund," Mr. Ahrens said.
According to Morningstar Inc. of Chicago, the Vice Fund's 18.7% annualized return from its September 2002 inception through his departure Sept. 6, 2005, placed it 99th among 281 mutual funds in the mid-cap-blend category.
The category average over the period was 18.1%. The Standard & Poor's 500 stock index produced an annualized return of 12.3% over the same period.
The new fund, which should be available to investors in early March, typically will invest in 40 to 50 companies, according to the prospectus. Mr. Ahrens said he is restricted from naming specific stocks that might be included in the new fund.
The manager is operating a one-man shop, though he is working with Gemini Fund Services LLC of Hauppauge, N.Y., to help get the fund off the ground.
While Mr. Ahrens manages the portfolio, Gemini will act as transfer agent, handling fund accounting and administration services.
The Vice Fund, which is co-managed by Michael Henry and Charles Norton, was down less than 1% during the period from Mr. Ahrens' departure through Thursday.
The S&P 500 was up about 4% over the same period.
Mr. Ahrens, who described his departure from Mutuals.com as "rocky," acknowledged in October that his departure from the firm was related to his feeling "uncomfortable" with the legal situation that several of the company's executives faced at that time.
In 2003, the SEC filed civil charges against Mutuals.com and three of its executives for alleged trading improprieties spanning from 2001 to 2003.
In 2004, the U.S. attorney for the Southern District of New York charged the executives - chief executive Richard Sapio, president Eric McDonald and compliance officer Michelle Leftwich - with fraud.
While several fund firms were accused of trading abuses in late 2003, the SEC described Mutuals .com as one of the worst offenders.
In early 2005, the three executives were arrested, and they no longer work at the firm.
By Jeff Benjamin January 16, 2006
<SCRIPT language=Javascript src="/javascripts/crownpeak.js" type=text/javascript></SCRIPT>Dan Ahrens has found his way back into the business of money management, following his September resignation from Mutuals.com Inc. in Dallas, where he managed the $44 million Vice Fund (VICEX) to an 18.7% annualized return over three years.
Mr. Ahrens, who wrote the book "Investing in Vice: The Recession-Proof Portfolio of Booze, Bets, Bombs and Butts" (St. Martin's Press, 2004), plans to pick up where he left off with a new fund that taps into the popularity of gambling.<SCRIPT language=JavaScript>OAS_RICH("Middle");</SCRIPT><SCRIPT language=JavaScript><!--var plugin = 0;if (navigator.mimeTypes && navigator.mimeTypes["application/x-shockwave-flash"] && navigator.mimeTypes["application/x-shockwave-flash"].enabledPlugin){if (navigator.plugins && navigator.plugins["Shockwave Flash"])plugin = 1;}else if (navigator.userAgent && navigator.userAgent.indexOf("MSIE")>=0&& (navigator.userAgent.indexOf("Windows 95")>=0 || navigator.userAgent.indexOf("Windows 98")>=0 || navigator.userAgent.indexOf("Windows NT")>=0)) {document.write('<SCRIPT LANGUAGE=VBScript>\n');document.write('on error resume next \n');document.write('plugin = ( IsObject(CreateObject("ShockwaveFlash.ShockwaveFlash.3")))\n');document.write('if ( plugin <= 0 ) then plugin = ( IsObject(CreateObject("ShockwaveFlash.ShockwaveFlash.4")))\n');document.write('if ( plugin <= 0 ) then plugin = ( IsObject(CreateObject("ShockwaveFlash.ShockwaveFlash.5")))\n');document.write('if ( plugin <= 0 ) then plugin = ( IsObject(CreateObject("ShockwaveFlash.ShockwaveFlash.6")))\n');document.write('</SCRIPT> \n');}if ( plugin ){document.write('<OBJECT classid="clsid
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Through his new company, Ahrens Advisors LP in Dallas, he filed a prospectus with the Securities and Exchange Commission on Jan. 6 for the Gaming and Casino Fund.
Unlike the more diversified Vice Fund, which Mr. Ahrens helped launch in September 2002, the new fund will be designed as more of a pure-play gaming and casino strategy.
According to the prospectus, he will invest at least 80% of the fund's assets in gaming and casino companies, as well as the bustling video game industry.
The new fund, while still fitting into the category of so-called sin stocks, will be distinct from the Vice Fund in that it will have limited exposure to the strength of the alcohol and tobacco industries.
Under Mr. Ahrens' management, the Vice Fund maintained significant positions in both tobacco giant Altria Group Inc. (MO) of New York and St. Louis-based beer maker Anheuser-Busch Cos. Inc. (BUD).
With the flexibility to allocate 20% of the fund outside the gaming and casino industries, he still will give investors exposure to areas such as alcohol and tobacco, but he doesn't apologize for offering a narrow investment focus.
"A lot of investors who had contact with me while I was managing the Vice Fund said they were looking for this kind of pure play in gaming and casino stocks," Mr. Ahrens said.
When asked whether he felt a required 80% exposure to gaming and casino stocks could become too restrictive, he said he considered it a starting point and that 100% exposure to those two industries isn't out of the question.
"The gambling industry is a booming market, and I think gaming and casinos will always be strong areas," Mr. Ahrens said. "Gaming has become ingrained in our society, and it's not going away."
He compared his concentrated strategy to other sector-specific mutual funds.
"I don't see this fund as being any more unusual than the first tech fund or the first health-care fund," Mr. Ahrens said.
According to Morningstar Inc. of Chicago, the Vice Fund's 18.7% annualized return from its September 2002 inception through his departure Sept. 6, 2005, placed it 99th among 281 mutual funds in the mid-cap-blend category.
The category average over the period was 18.1%. The Standard & Poor's 500 stock index produced an annualized return of 12.3% over the same period.
The new fund, which should be available to investors in early March, typically will invest in 40 to 50 companies, according to the prospectus. Mr. Ahrens said he is restricted from naming specific stocks that might be included in the new fund.
The manager is operating a one-man shop, though he is working with Gemini Fund Services LLC of Hauppauge, N.Y., to help get the fund off the ground.
While Mr. Ahrens manages the portfolio, Gemini will act as transfer agent, handling fund accounting and administration services.
The Vice Fund, which is co-managed by Michael Henry and Charles Norton, was down less than 1% during the period from Mr. Ahrens' departure through Thursday.
The S&P 500 was up about 4% over the same period.
Mr. Ahrens, who described his departure from Mutuals.com as "rocky," acknowledged in October that his departure from the firm was related to his feeling "uncomfortable" with the legal situation that several of the company's executives faced at that time.
In 2003, the SEC filed civil charges against Mutuals.com and three of its executives for alleged trading improprieties spanning from 2001 to 2003.
In 2004, the U.S. attorney for the Southern District of New York charged the executives - chief executive Richard Sapio, president Eric McDonald and compliance officer Michelle Leftwich - with fraud.
While several fund firms were accused of trading abuses in late 2003, the SEC described Mutuals .com as one of the worst offenders.
In early 2005, the three executives were arrested, and they no longer work at the firm.
