The Gensler Twins: Identical? Don't You Believe It

Rob Gensler is the star fund manager, Gary the industry critic

The Gensler twins are like the proverbial peas in a pod, only more so. They are a 99.99% molecular match. Their slight builds and receding hairlines are carbon copies. But as mirror-image siblings--who occur in only one of every 1,000 twin births--they also have distinct differences. The phenomenon produces such traits as hair whorls, or fingerprints that twist in opposite directions. In the Genslers, one is left-handed and parts his hair on the right (Robert). The other is right-handed and parts his hair on the left (Gary).

But there's more here than meets the eye. The 45-year-olds' views on politics and business couldn't be further apart. Democrat Gary, the elder by three minutes, is co-author of The Great Mutual Fund Trap: An Investment Recovery Plan, which lambastes the $6 trillion industry for perpetuating the myth of the Star Manager. Its main premise: The notion that actively managed funds can beat the market through deft stock selection is a hoax. And fees are too high. He says that investors are better off buying funds that track an index, such as the Wilshire 5000. The "trap" is believing that anyone can deliver above-average returns.

Turns out that identical twin Robert, a Libertarian, is an odds-defying star money manager at Baltimore's T. Rowe Price Group Inc. His $430 million Media & Telecommunications Fund was ranked No. 1 in its category last year, losing 7% vs. an average 36% loss by peers. He beat the overall stock market, which lost 14%, by a mile. And he did that by buying stocks in the second-worst-performing sector--no small feat. He's still ahead of his telecom fund peers this year, though the fund has lost 27%. Analysts say he buys companies with strong free cash flow and sound balance sheets. And he has avoided the blowups like XO Communications Inc. "It's not about picking winners, it's about not making as many mistakes," says William Harding, senior analyst with Morningstar Inc. "It speaks to Gensler's ability to pick stocks."

The philosophical differences don't end with mutual funds. Gary, who served in the Clinton Administration, helped Senator Paul S. Sarbanes (D-Md.) write one of the pieces of legislation that financial services firms hate most: the Sarbanes-Oxley Act, which calls for an industry overhaul. He is outgoing, with the ingratiating manner of one destined for politics. By contrast, Robert leans decidedly to the right. He is more abrasive, recalls Julian C. Stanley, founder of the Study for Mathematically Precocious Youth at Johns Hopkins University, where the brothers studied as teenagers. Both have had Wall Street careers, but on different tracks: Gary joined the 133-year-old Goldman Sachs Group Inc., making partner before he was 30. Robert earned his stripes from the scrappy Salomon Brothers, now part of Citigroup.

Gary's criticisms have turned heads at T. Rowe. "Advocates of indexation are not new," says Chairman George A. Roche. "But highly skilled managers help people achieve their financial goals." Robert's co-workers have taped notes to his office door, and asked, "Was your brother dropped on his head at birth?" While Gary acknowledges his brother's accomplishments in the book, he says: "It's too hard to find the Rob Genslers. I hope that more investors use common sense and go with passive investing." Robert hasn't read Gary's book and doesn't intend to; he'd rather play with his kids, he says.

Robert has had his payback. Because of his stellar performance, he's in hot demand by the media for rating stocks and making market calls. That riled Gary's co-workers in the Clinton Administration. Treasury officials, especially, are forbidden from making public comments on the market. So whenever Robert appeared on TV, the switchboard automatically lit up at then-Treasury Secretary Robert E. Rubin's office with complaints about Gary.

Given their high profiles, incidents of mistaken identity dog the Genslers. When Gary was sworn into office at Treasury, Rubin, now a senior executive with Citigroup, heartily congratulated brother Robert by mistake. "I think we have a security problem," quipped Gary. Later, Robert compounded the confusion by receiving guests at his brother's congratulatory party. "Rob's no longer allowed near the front door at my parties," says Gary.

The days of deliberately swapping identities for kicks have been behind them, mostly, since college. At 18, the two young math prodigies shared not only looks and last names, but identical intellects. Both wound up as classmates in a freshman, honors-level economics class at the University of Pennsylvania's Wharton School. The semester's first test set the tone: When it was announced that only two students scored higher than 50 points, Robert shot off a hurried note to his brother. His score was 51. Gary wrote back: "We must be twins; 51." Says Robert, reflecting on both the past and present: "There's no one I'd rather lose to, but I'd rather win."

That piece of paper, crinkled with age and a permanent fixture in Robert's wallet for the better part of 27 years, is a symbol of respect--and fiery competition between brothers. Repeat marathoners both, they have pushed each other to excel. Born the youngest two in a modest, middle-income family of five--of parents who never went to college--the Gensler boys are each other's muse. "It's not that they try to outdo each other," says mother, Jane, "they just try to keep up with each other."

Mother knows best, and so, apparently, do older brothers. When asked about the Wharton test scores, Robert mistakenly recalled he had lost by one point. Gary--who completed both undergraduate and graduate work there in four years, graduating summa cum laude--replied: "Did I beat him? I thought we had tied." His book may not turn into a best-seller, but with such tact, a political career could be in the cards.

By Mara Der Hovanesian in New York

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