ATTACK STRIKES HEART OF FUND FAMILY

attack on the World Trade Center is Fred Alger Management. With offices on

the 93rd floor of the North Tower, 38 of its 55 employees working there are

still missing.

One of them, president and CEO, David Alger.

The list of investment companies with World Trade Center offices reads like a

Rolls Royce roster with names like Alger and OppenheimerFunds familiar to millions

of fund investors. While OppenheimerFunds, with nearly 600 employees

occupying floors 32 through 37 of the South Tower, have reported all

accounted for, Fred Alger Management was not as fortunate.

"The terrorist attack is a personal tragedy for my family as well as for all

of our employees and their families, " said Fred Alger, chairman of Fred

Alger Management Inc. Fred, the older brother of David, founded the firm in

1964. And, up until Wednesday, Sept. 12, had spent the past few years in

semi-retirement enjoying part of that leisure time in Palm Beach, Fl. Now he

has assumed the day-to-day active management of the firm bearing his name.

What happens when a mutual fund family suddenly looses its president, CEO and

portfolio manager? What happens when an investment company finds its offices

destroyed? And, what happens to shareholders money and accounts in disasters?

>From a business point of view, and with all personal and emotional losses

aside, the Alger story pretty much tells it all.

Before David became president of Fred Alger Management, it was his older

brother Fred who had made his presence known on Wall Street. One of the

so-called "Three Fred's" during the Go-Go days of the 1960s, the elder Alger

established himself--and his firm-- as aggressive growth managers.

David Alger began his investment career in 1968 with the Irving Trust Company

as an analyst. When I interviewed him in mid-December 1998, we talked about

his past experience, the firm, its investment style and the funds he managed.

" After that (Irving Trust), I joined Fred Alger Management in å71, was an

analyst and then director of research until we started our mutual fund group

in 1986. And at that point, became portfolio manager on all the funds."

But David Alger wasn't the only portfolio manager of the funds. On the

Spectra Fund, for instance, he shared the portfolio manager's role with David

Hyun. And therein lies the answer to the first question: When a fund suddenly

looses a portfolio manager today, there's a good chance that the fund was

either co-managed or managed by team of professionals. Consequently, any

unexpected loss doesn't leave the fund without a manager at its helm. Or,

mean that the fund has necessarily lost its cache or investment style going

forward. It means that a change has taken place and that investors need to

take some time to assess what those changes mean to them.

Fred Alger Management, Inc. is a firm that has its own research company, its

own transfer agency and when picking stocks for its funds, does so from the

bottom-up. And, like all well-established investment companies, has off-site

locations in which records are kept in case of emergencies.

"I'm sitting in our disaster recovery site in Morristown, New Jersey," says

Jim Connelly, executive vice president of Fred Alger Management, Inc. "And

that's where the whole firm is actually located right now."

As well as having offices in the World Trade Center, Connelly explained that

the firm, with 235 employees worldwide, also has offices in Jersey City and

Morristown, New Jersey. "If there was ever a problem in downtown Manhattan,

it could very well effect Jersey City, so it didn't make much sense to have

the offices back each other up. That's why we have this massive space in

Morristown."

That means the answer to the second question, What happens when an investment

company has its offices destroyed? is: Fund families plan for the unexpected

and have back-up, off-site locations in which records are held and business

can be conducted.

"We're our own transfer agent, as well, so from transfer agent to portfolio

account to portfolio monitoring or whatever, we are up and running, " says

Connelley.

Not all fund families are their own transfer agents. But whether the transfer

agent is in-house or not, all have their own back-up systems. As do the

fund's custodian banks.

Bottom line, there's really nothing to worry about if you're a shareholder in

any Alger funds or other fund family with offices destroyed in Tuesday's

disaster. Those in the fund industry are great record keepers. It's the

irreplaceable loss of friends, acquaintances and loved ones that's so hard to

bear. And in the end reminds us that money isn't everything.