TIGER, BURNING BRIGHT THE WORLD OVER
On my recent trip to Germany, a taxi driver asked if I was an American and if I played golf. I realized he was wearing a golf cap, and then I noticed an array of golf tees neatly arranged in the dashboard air vents. Before I could respond, he said: "Tiger Woods, Augusta National!" I took BUSINESS WEEK out of my briefcase and showed him the cover photo ("Tiger, Inc.," Cover Story, Apr. 28). The driver smiled and said: "Tiger Woods is beautiful. He is great." We said good-bye at the station, and on the train trip to Munich, I reflected on how this young man has been embraced as a role model all over the world.
Sudbury, Mass.Return to top
DAVID BRONNER ABLY SERVED ALABAMA'S PENSION FUND
Pension fund managers, like football coaches, are accustomed to Monday-morning quarterbacking, and "How not to do a deal" (The Corporation, May 5) is certainly that. The article basically says that Retirement Systems of Alabama made a nice profit on a deal but should have made more.
The principal error of the article is its central point: that Retirement Systems' investment staff failed to provide for a prepayment penalty in the deal. But the Park Communications deal did include a prepayment penalty, pursuant to which Retirement Systems were paid $17 million. Thomas G. Milne, who was quoted as saying there was no prepayment penalty, has advised me the quote is inaccurate.
The article recognizes that Retirement Systems earned 13.5% on this investment, but it overlooked the fact that, as a part of the deal, Park also agreed to provide $12 million worth of free advertising for the Robert Trent Jones Golf Trail, which is owned by Retirement Systems, and for the state of Alabama.
It is easy to criticize a particular investment years later, but it is more meaningful to evaluate an investor's performance on a broader basis. During Dr. David Bronner's service as chief executive of the Alabama Retirement Systems, the funds have grown from $500 million to $16 billion, and Retirement Systems, which were 25% funded, are now virtually 100% funded.
The Alabama Retirement Systems are generally regarded as among the best retirement systems in the country and, most importantly, Alabama public employees' pension benefits are secure.
William T. Stephens
Retirement Systems of Alabama
Editor's note: The $17 million that Stephens mentions was part of the 13.5% annual interest rate earned by the fund and reported in the story. The fee was payable under various circumstances, including prepayment of the debt.
I take strong exception to "How not to do a deal." I was a member of David Bronner's staff in the late 1970s, when we pioneered the use of many new financial instruments of the day, such as the infant mortgage securities markets. Did we make mistakes in these new instruments? Yes, but there was never a question of personal profit or the motives involved. We were concerned only with building the best state pension fund in the nation.
David Bronner instilled in his staff the mental toughness to be successful in money management, and he also taught us the value of dealing honestly and ethically with all parties concerned. Implying that David Bronner acted for personal gain or abused his position is simply not an accurate view of the man or the values he represents.
I have never known David Bronner to be other than totally forthright and fair in his dealings with the investment community, his board, and the public.
Joseph W. Smith Jr.
American Family Life
Assurance Co. of Columbus
Editor's note: The story did not say or intend to suggest that David Bronner acted unethically or for personal gain. It credited him with a good investment record.Return to top