Fund name: WHG LargeCap Value (WHGLX)

Objective: The Fund is to seek long-term capital appreciation by investing at least 80% of net assets in equity securities of large U.S. companies that have a market capitalization within the range of companies comprising the Russell 1000 Value Index. The fund is diversified, typically holds 40-60 issues and has a median market cap of $31 billion (as of 12/31/06). When the fund invests in common stocks, it seeks ample free cash flow, low levels of debt and improving debt/equity ratios, improving ROE and "positive earnings surprises without a corresponding increase in Wall Street estimates." The fund is unusual in stipulating an interest in master limited partnerships and royalty trusts, both of which generate high levels of current income from the natural resources sector.

Adviser: Westwood Management Group. Founded in 1983, Westwood is a Dallas, Texas- based, institutional asset management firm that specializes in value equity and income portfolios. The firm’s clients include corporate pension funds, public retirement funds, endowments, foundations, mutual funds, and high net worth individuals. Westwood focuses on delivering consistent, superior long-term performance while limiting downside risk. The firm currently manages approximately $5.5 billion.

Manager: Susan Byrne is the lead manager, as well as founder, chair and Chief Investment Officer of Westwood Management Corp.

WHG uses an unusually robust team management system for all of their funds. The investment research team is organized by industry coverage. The same team works on all of the funds and separate accounts, which have the same objective. The team meets weekly to discuss current investment ideas and debate the merits of recommendations, taking into account the prevailing market environment, the portfolio’s current composition, and the relative value of alternative investments. Investment decisions are made by majority agreement of the portfolio team. Ms. Byrne, as lead manager, has a veto over the stock/weight selection.

Inception: June 28, 2006.

Minimum investment: $5,000, reduced on September 21, 2006 from the previous minimum of $100,000.

Expense ratio: 1.00% after expense reimbursements, on an asset base of $11 million. 3.17% without the reimbursements. There is no expiration set for the reimbursements.

Comments: The argument here is really amazingly, remarkably straightforward: retail investors can buy the services of an investing star at wholesale prices.

Ms. Byrne is a remarkably talented and experienced investor, particularly within the world of larger cap stocks. She made the ill-considered decision to enter a joint venture with (the rapacious) Mario Gabelli, whose firm would provide marketing, distribution and administrative services. Unfortunately, that also allowed Gabelli to add a 12(b)1 fee, create load-bearing classes, and set the fund’s expense ratio (between 1.50 and 1.75%, depending on share class). In addition, Mr. Gabelli and his firm have had well-publicized legal problems, at both the state and federal level.

Apparently, these developments have discomfited Ms. Byrne and the folks at Westwood and they have now launched the WHG funds whose expense ratios are lower. WHG LargeCap Value is a clone of Westwood Equity.

That’s a very good thing. Even with the drag of a 1.5% expense ratio, Westwood Equity has a great long-term record of accomplishment: 12.3% annualized over the past 15 years. That’s in the top 20% of large value funds and it easily bests the S&P500 for every trailing period. Over roughly the same period (the 15 years ending in 12/05), Byrne’s private managed accounts – using an identical discipline but with lower expenses –returned 14.3% per year. The only large-value funds to produce comparable results are Dodge & Cox Stock, Muhlenkamp, a couple of closed Mutual Series funds, and Weitz Value.

The downside is discipline: Ms. Byrne appears to possess considerable. As a result, she seems willing to wait out extended periods of underperformance when she thinks she’s right and the market is wrong. That can lead to extended periods of underperformance. By way of example, Westwood Equity trailed its peer group from 2001 – 2004, driven in part by her conviction that energy stocks were seriously undervalued. During this period, the fund’s turnover rate dropped substantially from its historic norm – apparently evidence of Byrne’s willingness to wait out the market.

Bottom line: Great investors are, typically, very trying creatures. They think, act, and invest differently than the rest of us do. They get out of step, fall behind, refuse to change and lead to spirited discussions about "stupid pills." Ms. Byrne and her team are very good, perhaps even great, large-value investors. The question is simply whether her style is a good match for your temperament.