Pacesetters

---

Healthy Portfolio

In the past five years, Financial Health has returned 320.3 percent to investors, and during the past three years while the economy has slid into recession, Kaweske's fund returned 248.2 percent. His outstanding performance has not gone unnoticed. Most of that growth, over $700 million, had taken place since 1988, when the fund was still small ($10 million) but already posting impressive returns.

"When you're number one, everyone wants to be a part of that," acknowledges the 50-year-old portfolio manager and 1966 industrial management graduate.

Kaweske recently hired an associate, but remains firmly in control of Financial Health and Financial Industrial Income, a $1.3 billion growth and income fund, which has remained in the top 10 percent of stock funds, posting gains of 117.3 percent and 82.9 percent for the five- and three-year periods, respectively.

Of course, running a sector fund in the burgeoning health-care industry contributes to his record. Kaweske concentrates his holdings in pharmaceuticals, biotechnology, hospital supplies, medical technology and health-care delivery. But the secret to his success was something he learned at Georgia Tech while an undergraduate.

"The key to staying on top is the research, doing your homework," he says. "What was invaluable to me at Tech was the breadth of the education. Certainly in any of the Tech curricula you take the basic engineering courses, and they provide a good technical foundation for understanding how science was developed and is developing. That kind of understanding is essential for the research we do, especially when dealing with newer medical technologies."

Kaweske went on to get a master's in business administration from the University of Wyoming in 1968, and he feels that any Tech grad aspiring to a securities analyst career should also augment his education with an advanced business degree. But as always, experience shapes the opportunities, and Kaweske's early experience was as a research analyst.

His first job was with Fidelity in Boston, which he joined on April Fool's Day, 1968. He spent three years with Fidelity researching oil and gas firms, and the pulp and paper industry. He left Fidelity in 1972 to become a securities analyst for Aetna Life and Casualty in the transportation arena, analyzing airlines, railroads, trucking companies.

In 1980, he joined IDS in Minneapolis, where he was again an analyst in the oil and gas industry, as well as doing some work in hotels, restaurants and telephone utilities. It was while he was with IDS that he got his first taste of fund managing, when he was given responsibility for part of one of IDS's larger funds.

And it was as a fund manager in 1985 that he came to Invesco Trust Co., a wholly owned subsidiary of Atlanta-based Invesco MIM Inc., which with $21 billion under management is the largest money manager in the Southeast and the 15th largest in the nation. Invesco MIM is headed by another Tech graduate, Charles William Brady, IM '57.

o stay abreast of his industry and up with the latest developments in medicine, Kaweske attends courses at the University of Colorado ("along with other 22-year-olds"). He's currently enrolled in a course on immunology, the science that is breaking new ground in cancer and AIDS research.

Kaweske encourages Tech undergrads to consider careers in his profession despite recent shakeouts and scandals in the securities industries.

"Scandals are endemic in every part of our society--politics, religion, business," he says. "They're pervasive and they've always been here and always will be. But that shouldn't discourage someone from coming into this profession."

"I had one instructor at Tech, Roderick O'Conner," he continues. "He taught a management philosophy course, a very inspiring course that had a big impact on me. He said that the most important trait you'll have to go forward with in the business world is integrity. I still very much believe in that."

Kaweske won't be relying on integrity alone to stay on top with the Financial Health fund, although historically, some other top-rated funds that grew as quickly have become cumbersome to handle.

While he admits that might be true in other sectors, the health-care market is so huge that his fund is in no danger of outgrowing it.

"The health-care industry had revenues of over $700 billion last year. That's 12 percent of the gross national product and it's predicted to be 14-15 percent by the year 2000," Kaweske asserts.

With the graying of America and new developments in biotechnology and health- care distribution, he sees ample opportunity for his fund to continue to grow and stay up front. The only difference for his is that it now "requires more research input to keep us where we are."

---

Instant Recall

Five years later, he received his bachelor's degree in electrical engineering, followed by his master's degree in electrical engineering in 1980.

When Szlam went to work for Solid State Systems Inc., a Kennesaw, Ga., firm, he didn't know the principles of telephone communications. Less than a year later, he invented an auto dialing and receiving system called PhoneFrame that has revolutionized the phone industry.

This year, Inc. magazine named Szlam entrepreneur of the year for the Alabama-Georgia-Tennessee region. His company, Melita International, is worth $60 million--three times that amount, many analysts say, if its stock was sold on the open market.

Szlam built the company without bank loans; it has remained debt-free since it began in 1979.

With his parents, Szlam immigrated to the United States from Poland in 1969. At the time, Poland was in political unrest; Jews, pointedly blamed by the government for internal problems, were encouraged to leave. The Szlams left behind all their possessions, and for seven months waited in Rome while the Hebrew Immigrant Aid Society sought sponsors for them. When they arrived in Atlanta, Polish-speaking Jewish volunteers greeted them; the Atlanta Jewish community helped them start over, providing housing, food and clothes.

One of the family's new friends, Clara Rubenstein, brought Szlam to Georgia Tech and pleaded his case with the director of admissions. "I still don't know what she said," he admits.

But the opportunity changed Szlam from a swaggering 18-year-old interested mainly in "girls and music," into a serious, eager student. "Always my hand is up," he says. "I have question after question." He smiles. "Sometimes I think I am the stupidest person in school."

Today, Szlam works long hours, often spending early evening with his family--wife, Halina; daughter. Julie; son, David--then continuing to work when they're asleep. He spends much time on the road, handling difficulties and meet customer needs himself. "The customer is first," he says. "If there's a problem, I won't send someone else to take care of it."

And as good as Szlam believes his PhoneFrame is, he insists it can be better. The system allows companies to manage large volumes of calls, and is especially valuable to those involved with bill collection and telephone sales. If an operator puts through a call and the line is busy, the system automatically re-dials until the call can be completed. Szlam believes PhoneFrame elements can be scaled down, made to operate more efficiently, and fit into a more convenient package. He hopes to combine the functions of a telephone receiver, television screen, fax machine, answering machine and word processor into a mobile office. "The workstation of the future must fit in a briefcase," he says.

zlam compares this concept to the evolution of message delivery--the progress from Pony Express, to the U.S. Mail, to Federal Express, to the fax machine. "We have gone from weeks to seconds," he explains. "But we're still not satisfied."

Szlam's awareness of the U.S. consumer's insistence on convenience came early. After Poland's austerity, the United States seemed extravagant. "At first I cannot believe there is a dry cleaners and a gas station on every corner," he says. "Why is this so?" he asked himself. "Why does this country need so many of these things?"

When Szlam graduated from Tech and became involved in the daily aspects of electrical engineering, he pondered his earlier questions, adding a new one: What does the customer need? As Szlam learned more about the computers and telephone communications, he became convinced that a link between the two would fill a void. "That turned my life around," he says.

He began experimenting in his garage; within a few months he had created the PhoneFrame's forerunner. When he had perfected it, a friend took orders and Szlam continued to work out of his garage. His dreams, his ideas and his company grew.

He believes that by the turn of the century, Melita will be a billion-dollar corporation.

"I see only good things ahead," he says.