Alger, which focuses on growth-equity investing, has proven willing to adapt. It warrants an Average Parent rating.
Founded in 1964, Alger has had only three leaders. Current CEO Dan Chung has served in that role since 2001. During his tenure, the firm has ventured into new areas. A suite of high-conviction offerings has garnered some broader appeal; other launches, such as 2024’s Alger AI Enablers & Adopters strategy, focus on narrower themes. Alger has embraced exchange-traded funds in an effort to push beyond mutual funds, and while such offerings tend to be cheaper, many of the firm’s products are relatively expensive. The firm is also looking to expand distribution into Europe and Asia.
Expansion has also occurred by acquisition. Alger bought small- and mid-cap equity shop Weatherbie in 2017 and international/global equity firm Redwood Investments in 2024. These shops maintain their investment autonomy, and while that’s attractive to the acquired parties, it creates some redundancy in Alger’s product lineup. The investment teams could benefit from greater collaboration, too.
Chung is married to one of founder Fred Alger’s daughters, so control remains squarely within the family. That said, Chung helped secure a portion of the firm’s economic interest to incentivize a handful of key nonfamily personnel, and nearly half of the employees (including all portfolio managers) participate in a profit-sharing plan. It isn’t clear, though, what would happen if the family needed to exit or consolidate its stakes.
Note: This share class' Parent Pillar rating is analyst-driven, as its Branding Name, Alger (Branding Name ID: BN000007VL), is covered by Morningstar Manager Research.
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