Induction Speech for Daniel J. Fuss
Inducted November, 2000
Dan is a Milwaukee native, a graduate of Pope Pius High School and Marquette University, where he was affectionately known to his classmates as “Father Fuss”. His C.V. says that he served three years as an officer in the Navy. Upon careful examination of the record I found that Dan actually took a vow of silence and entered a monastery. At his first meeting with theAbbott in charge he was relieved to learn that it was not a vow of complete silence. At the end of each year he was to meet with the Abbott and have the opportunity to say two words. Those of you who know Dan appreciate that he is thoughtful, chooses his words carefully, and speaks deliberately, so it was a great relief to him to learn that he had the right to express
himself each year.
At the end of the 1st year, Dan met with the Abbott and uttered his two words: “Bed Hard”.
At the end of the 2nd year Dan met with the Abbott and uttered his two words: “Food cold”
At the end of the 3rd year Dan met with the Abbott and said: “I Quit”
Whereupon the Abbott replied: “Dan, you’ve been nothing but critical ever since you got here. With your highly developed analytical and critical faculties you should seek an investment career in order to achieve the life of luxury you desire” And that is how Dan arrived at the decision to start an investment career.
Since 1958 when Dan entered the investment business, he has never looked back, but he has not turned a blind eye to his former calling. For 9 years he served as a director of the Pope John XXIII Medical and Moral Institute, and thereafter for 9 years he served the Archdiocese of Boston as member of the Justice & Peace Committee.
Dan Fuss introduction:
Dan & Rosemary have two sons who are naturally their pride and joy and, as you would expect, bright sparks. Tommy is 11 and Danny is 13. In order to get some insight as to what Dan does for Loomis Sayles I called Tommy. “Tommy what does your Dad do?” After a thoughtful pause came the reply: “He is kind of like a Chairman”. I replied, “What does a Chairman do?” “Well, Tommy said, he does the same work other people do, but I guess its just a little more important.” Tommy might have added and “a lot more of it.” Dan is Vice Chairman & Director of Loomis Sayles, Chairman of the Firm’s Global Investment Committee, President, Loomis Sayles Mutual Funds, and Managing Partner & Chief Investment Officer ofthe Fixed Income Management Group, Member of the Investment Policy, Foreign Bond Policy and Global Asset Allocation Committees and finally Chairman of the Bond Policy Committee. His line responsibilities include managing the Loomis Sayles Investment Trust as well as large “separate accounts” and several series of the Loomis Sayles Funds. In 1995, Dan was recognized by Morningstar as the domestic bond fund Manager of the year. In commenting Morningstar wrote: “ of all the great bond-fund victories in 1995, none was quite as impressive as Loomis Sayles Bond Fund 28% rise. This performance followed consecutive number-one showings during the Fund’s first two full calendar years, 1992 and 1993.
In 1976 Dan joined Loomis Sayles after 5 years with the Boston Company, preceded by 7 years at Continental Illinois Bank. Not long into his first year at Loomis most all the Fixed Income Advisory accounts withdrew. In short Dan was presented with the perfect New Age Business Model: A lot of expenses, virtually no revenue and dreams of big growth. If only Dan had been an Equity Guy, instead of a Fixed Income guy he would have seen that an IPO was the answer to all his problems, and probably he could have retired by 1980!
In an effort to find a solution, Dan and his colleagues hired a consultant who advised them: 1. Don’t go into the bond business 2. Don’t accept any mandates from Municipalities because they are litigious and pay miniscule fees 3. Don’t accept any Taft Hartley accounts because they won’t pay fees. As you can probably guess, Dan’s contrarian nature lead him to throw this high priced advice into the waste basket, and he went on to build a spectacularly successful Fixed Income Advisory Business. How did he do it? I will get to that in a moment.
While preparing my remarks for this evening I contacted a former colleague of Dan’s, Bill Snyder, who lives in my community. When asked about Dan he replied: “Dan is a survivor.” For example, as fate would have it Dan and I had planned to have dinner with our wives in New York at the Four Seasons on the evening of Monday, October 19, 1987.
While we were being seated at our table, I asked Dan how things were going and he said “Its all gone. How about you? I replied in kind: “Its all gone.” At this point I suggested that in view of our circumstances and the cost of eating at the Four Seasons we should get up and go somewhere we could afford. To which Dan answered, “leaving would be admitting defeat. We are going to stay and enjoy our dinner.” Optimism is a hallmark of Dan’s personality
The rest is history, as they say. Today Dan Fuss directs the investment of over $ 37 Billion in Fixed Income Assets for Loomis Sayles. How did he do it? He kept in mind the first principle he was taught in the business: “only buy bonds that go up.” He never knows what the bond market will do, so he looks at bonds individually from the bottom up. He strives to increase income per dollar of original investment a little each year and all the while he worries about call protection to avoid unpleasant surprises. He was and is innovative. A unique characteristic of Dan’s investment approach to bonds is that he has always looked at them with an equity twist. He was one of the first Bond Managers to take an aggressive point of view toward institutional investing by buying busted convertibles when others had never done this and thought primarily in terms of buy and hold. My sources tell me that on occasion he has owned a high yielding electric utility equity or two in a bond portfolio. I hope this shocking disclosure of heresy in no way causes you to reconsider Dan’s well-deserved induction into the Fixed Income Analysts Society Hall of Fame.
Acceptance Speech for Daniel J. Fuss
To paraphrase Lloyd Bentson in his debate with Dan Quayle,
I know Dan Fuss
I work with Dan Fuss
And I can tell you; I’m not Dan Fuss!!
A former inductee has used the analogy of Butler Creek to describe the bond market very effectively. Dan talks about a river with crocodiles, teenagers, and hockey players in his description, so I’m not even going to attempt that!
Dan is the Managing Partner of our group, Fixed Income Management in Boston. As Associate Managing Partner, I’m like Al Gore. So, even though I invented the practice "bond picking" based on credit research, it was Dan who managed to take it to new heights, as you’ve heard.
FIM’s "style" is to construct portfolios based primarily on credit research. So we as a group, and Dan in particular, have a deep and sincere appreciation for the importance of credit research --- and the important contribution this society makes to that field.
I know how much this award meant to Dan, and how badly he wanted to be here tonight to accept it and express his appreciation. Many friends, associates, and clients are present to share in this moment: (Kent Newmark, Loomis - San Francisco; Diarmuid O’Connell, FIM retiree and wife Elizabeth; and Jae Park from IBM and wife Kim.)
So, on Dan’s behalf, Thank you!
