John H. Laporte, a onetime Morningstar fund manager of the year who beat three-fourths of his peers in his 22 years managing T. Rowe Price Group Inc.’s New Horizons (PRNHX) Fund, has died. He was 68.
He died on Aug. 12 at his home in Ruxton, Maryland, a suburb of Baltimore, his wife, Andrea Laporte, said in an interview. The cause was complications from lymphoma.
Known as Jack, Laporte worked at Baltimore-based T. Rowe Price (TROW) from 1976 until his retirement at the end of last year.
From 1987 to 2010 he was lead portfolio manager for small-cap growth portfolios as well as chairman of the investment advisory committee for New Horizons, one of the firm’s oldest funds, created by firm founder Thomas Rowe Price Jr. in 1960. The fund generally invests in companies with market capitalization of $2.5 billion or less.
Laporte oversaw a quintupling of assets in the fund, to $5.9 billion, during the two decades he ran it.
“All of us who were fortunate enough to know and work with Jack are better off for it,” Brian Rogers, T. Rowe Price’s chairman and chief investment officer, said in a statement. “We certainly benefited from his investment acumen, but also from the example he set as an individual for his high ethics and standards, patience, curiosity, cooperation, encouragement and sincere interest in helping us improve.”
After stepping down as head of New Horizons, Laporte remained active with the firm in a mentoring role until his retirement in December.
Morningstar Mutual Funds, a newsletter published by Chicago-based Morningstar Inc., named him domestic stock fund manager of the year after New Horizons returned 55 percent in 1995 compared with 30 percent for the Russell 2000 Index. When the Baltimore Sun checked in with Laporte about the honor, it found him “totally surprised” and “very flattered.”
Part of his success in 1995, the Sun said, came from his timely decision to reduce the fund’s stake in technology stocks and move the money into health-care shares.
In a 2003 interview, Laporte said he sought small companies with earnings growth of at least 15 percent and stuck with his winners no matter how big the companies got.
“Don’t sell your great companies too early,” Laporte said. “You want to sell a stock when it’s not doing so well, when earnings growth slows down or the company hits a wall, not because it hits an arbitrary number.”
His successor at the helm of New Horizons, Henry Ellenbogen, hasn’t dropped the torch. The fund had the highest total return over the past three years and the best risk-adjusted performance among small-cap funds that buy U.S. stocks, according to the Bloomberg Riskless Return Ranking. As of July 31 it had $13.2 billion in assets, according to data compiled by Bloomberg, more than twice as much as when Laporte left.
Its top holdings include Netflix Inc., Regeneron Pharmaceuticals Inc. and Lumber Liquidators Holdings Inc.
Ellenbogen said Laporte had a positive impact not just on investors but on the companies seeking their money.
“If a small company doesn’t have the right people managing it, and the right culture, it’s basically impossible for it to become a large company, and Jack was a perceptive evaluator of management,” Ellenbogen said in an e-mail. “And he could build relationships with management teams. He was a great example of how to do that positively, but also in a way where, obviously, we are acting as fiduciaries for our shareholders.”
John Henry Laporte Jr. was born on July 26, 1945, in West Orange, New Jersey, and raised in nearby Short Hills, the son of John Laporte and the former Donna Bailey. He said he developed a taste for investing as a child when his father, an accountant, had the family select and track a mock stock portfolio.
Laporte made his first real stock purchase -- four shares of AT&T -- when he was 12.
He attended Princeton University for his undergraduate work, receiving a degree in political science in 1967. Two years later he received a master’s in business administration from Harvard University in Cambridge, Massachusetts.
He spent seven years as a research analyst covering airlines and aerospace at Pershing & Co. in New York before moving to T. Rowe Price in 1976.
As a Princeton alumnus, he served on boards and established the John H. Laporte Jr. Class of 1967 Freshman Seminar in Finance. He was founding chairman of the SEED School of Maryland, a boarding school in Baltimore serving disadvantaged children in grades 6 to 12. He loved golf, squash, skiing, snowshoeing and hiking, and coached his sons’ soccer and baseball teams, his wife said.
He remained a T. Rowe Price investor and followed the market “like mad,” she said. “He loved nothing more than sitting at the trading desk.”
Survivors include his wife, the former Andrea Berry; sons Christopher, 36, and Timothy, 31; and two grandchildren.
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