What This Mother-Daughter Fund-Manager Team Can Teach Us About Investing

Of the roughly 7,700 mutual fund managers in the U.S., less than 10%—669 at Morningstar’s last count—are women. Among that group, Candace King Weir and Amelia Weir are likely the only mother-daughter team. In 1972, Candace was one of the first women to open her own institutional research firm that focused on small companies. In 1994, she founded Paradigm Capital Management, an Albany, N.Y., firm with about $800 million in assets under management. In 2008, she was joined by her daughter. Together, the women manage Paradigm Micro Cap (see Mother and Daughter Score With Micro Caps). They also have a unique perspective on the role of women in the fund business.

Kiplinger’s: To what do you owe your success in this heavily male industry?

Candace Weir: Over 30-plus years in the business, we have garnered a lot of respect in the small-company universe, and our reputation precedes us. We do primary research with companies for 99% of our investments, and when we call CFOs, our phone calls are returned. That’s an intangible asset. In 2008 [when the stock market lost 37%], we did well because we stuck with companies that persuaded us there was nothing fundamentally wrong with their business.

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Does being women help you develop those relationships?

Amelia Weir: Women have an ability to be more graceful and polite. They bring less ego, especially in the small-cap arena, where people pride themselves on their scrappiness. If a company has had a good quarter, we praise them. If they have had a bad quarter, we don’t crucify them.

Do you ever get negative reactions from male counterparts?

Amelia: People sometimes make amazing assumptions. For example, they often assume that Candace inherited the business from her father or husband. But you don’t take offense. If you’re not going to see eye to eye, you just move on. In this business, you stand on your credibility. If your ideas are good, it doesn’t matter if you’re a man or a woman.

How did you come to be in business together?

Amelia: I’m not as quantitative as my mother. When we went back-to-school shopping when I was a child, she would be checking to see if the store shelves were well stocked and how many people were in the checkout line. It was like she was running a little calculator in her head.

But I was an English major in college and started as an editor in equity research. When I decided to switch over to asset management, I went back to school [Wharton] to get more financial background. I was at another fund, but my mother and I had talked about getting together for two years. I finally joined her in 2008—on the day that Lehman Brothers went under.

Candace: I always had a firm belief that families should never work together. Amelia and I have always had a close relationship, and I didn’t want anything to come between us. But here we are, eight years later.

Do you ever disagree?

Amelia: Each of us has companies in the portfolio for which we have a stronger sense of ownership, and once in a while we have a difference of opinion. It’s a competitive industry, and it’s painful when one of your names blows up. But we’re not rooting for each other’s failure. We want what’s best for the portfolio. [Both women invest in their fund, and Candace is the largest shareholder.]

What advice would you give young women who are thinking about entering this field?

Amelia: Don’t discount your own abilities. If you have a robust intellect and curiosity, it’s going to make up for any lack of quantitative ability and interest. Especially in the small-cap arena, you’re talking about things that are creative and off the beaten path.

Candace: The three big things are to be curious, passionate and able to absorb information. Every day there’s a new pile of stuff to read. The calculus is less than 5% of it. The important thing is, do you understand what management is telling you?