The Investment Showman

In the beginning, there was total darkness. Then charts blinked blindingly on and off five screens as an electronic-music sound track filled the New York Hilton ballroom with Tarzanlike cries, boos and whistles. Next, harp music played while the screens flashed images of the sybaritic life--money, an island sunset, girls. Finally, a slender, gold-shirted young man with flowing sideburns mounted the podium. To belt out a rock paean to hedonism? No, to denounce the Securities and Exchange Commission for not sufficiently analyzing the economic impact of its regulatory decisions.

The audience was not disappointed. It consisted of more than 2,100 brokers, bankers and other businessmen, who had paid $325 each last week (all together nearly $700,000) to attend the third annual Institutional Investor conference, an affair that could have been called Gold Diggers of 1970. They expected, with good reason, to be provided with both entertainment and provocative comments on the management of money. Those are the elements that the speaker, 28-year-old Gilbert E. Kaplan, has mixed to create one of the fastest-growing businesses on Wall Street and a personal net worth of about $3,000,000.

Kaplan's conclaves, held in the U.S. and Europe, feature what he describes as "a bit of show biz" and big-name speakers who get fees as high as $3,000. They discourse on trends and ideas in and out of the market that Kaplan thinks will interest investors. At last week's three-day affair, Consumer Crusader Ralph Nader urged institutional investors to press corporate managements to do more about safety and pollution control. Mutual Fund Millionaire Bernard Cornfeld warned that the Viet Nam War and U.S. social turmoil were making American investments less attractive to Europeans, and Newscaster David Brinkley spoke about the inefficiency of Government bureaucracy.

Mini-Empire. A former economist at the American Stock Exchange, Kaplan has built a mini-empire based on the exchange of ideas. In 1967 he thought that the influential men who run investing institutions--mutual funds, pension funds, trusts--should have a magazine written specifically for them. With modest bankrolling from Gerald Bronfman (of the liquor family), relatives and friends, he launched The Institutional Investor. "The Double Eye," as I.I.. is dubbed, is now an ad-packed monthly that is sent free to 20,000 portfolio managers and big brokers. The magazine quickly became the foundation for a company, Institutional Investor Systems, that today also publishes Corporate Financing (six issues a year), three business directories, and transcripts and tapes of business seminars. In addition, it organizes conferences for businessmen and bankers. Results for fiscal 1969: a net profit of $213,000 on revenues of $ 1,777,000.

Such a business could be staid. But Kaplan has taken aim at a growing audience--basically the younger, more aggressive, often fun-loving money managers. They appreciate pizazz as well as ideas. He gives them both. The Institutional Investor, for example, goes in for Pop art; one cover, on the New York Stock Exchange specialist system, showed a cavalry and Indians scene. The magazine is edited by George J. W. Goodman, the "Adam Smith" who wrote The Money Game, and writers can fairly easily earn $30,000 a year in salary, bonus and profits on stock options.

Bundle for Britain. In person, Kaplan, son of a Manhattan textile man, is hardly as flamboyant as his productions. He takes a novice gourmet's interest in food and wine, but he lives simply in a three-bedroom bachelor apartment. He plays the harpsichord and is studying Japanese because he feels that Japan will be "the country of the future." He muses about how he might help "to unlock some of those billions managed by our readers so that they benefit society instead of private interests." To that end, he is investigating ways of directing investments into city slums.

Like any young tycoon, he is brimming over with expansion projects. Among them: starting a consumer finance magazine, buying an art magazine, and taking more of his bundle into Britain, where the institutional-investment community has not as yet found anyone with Kaplan's flair.

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