George Kauffman -- Chief Investment Officer Is Firm's Ace In The Hole

-- Name: George Kauffman -- Age: 50 -- Position: Partner, chief investment officer, Sirach Capital Management -- Clients: Include Boeing, Airborne Express, city of Seattle, Seattle University, Farm Credit Bank of Texas, Fieldcrest Cannon, Brick Masons of Los Angeles -- Quote: "Financial rewards are nice, but the question you have to ask is, `Is it fun to come to work each day?' " -----------------------------

Six years ago, a Seattle investment company known as Sirach managed $70 million. Today, it manages more than $2.1 billion.

That's called growth.

The man most responsible for that growth, George Kauffman, is someone whose reputation for applying growth strategies to stocks is widening faster than you can count the number of zeroes in $2.1 billion

Kauffman, 50, is the driving force that made Sirach Capital Management a household name in financial circles nationwide.

A measure of his success is access - he talks frequently with market gurus such as Robert Farrell of Merrill Lynch, Ralph Acampora of Prudential Securities and Steve Leuthold of the Leuthold Group in Minneapolis to glean shadings that foretell market turns.

"You can look at people in two broad categories," said John Costello, principal at Eastside Catholic High School. "There are takers and there are givers. George is very definitely a giver, not only in time and in helping the school financially, but helping with his talent."

George and Cheri Kauffman's only child, Jeff, graduated from Eastside a year ago. The easy thing for George, then an Eastside trustee, to do would be to move along. Instead, Kauffman agreed to become a board member of the Foundation of Eastside Catholic High School, a new group whose goal is securing more permanent financing for the school. He is secretary for the executive committee of the board.

Kauffman was born in Yakima. He was raised mainly in Everett, but he spent three years in Saudi Arabia, where his father worked for Aramco.

"The first time I played golf," Kauffman said, "was on a sand course at Dharan, when I was 9 years old."

Before long, he was a caddy.

"Caddying gave you a great appreciation for work," Kauffman said.

Kauffman became a golfer, lettering twice at the University of Washington. A degree in finance was followed by five years in the U.S. Air Force, during which he was able to collect a master's degree in business from Ohio State University.

Over the years in Seattle, Kauffman has built a track record as an ace stock picker.

In January 1969, Kauffman started five years as a portfolio manager, first junior then senior, at National Bank of Commerce (later Rainier, later Security Pacific). He eventually supervised the group in personal trust.

He then jumped to the larger, and ultimately pivotal, Seattle-First National Bank, where he worked until 1981.

"I made a distinctive change in personal philosophy," Kauffman said. "John Privat, head of the investment group, promoted me and gave me a chance to be a supervisory person. I also knew that since our performance had been only so-so, I had a year to 18 months" to show improvement.

"I decided I had to be more active than passive," Kauffman said.

Banks traditionally gave clients latitude in picking their portfolios. In addition, the common bank investing strategy was value: Find depressed stocks that were underperforming the market but had good fundamentals, and buy hoping for a move up.

But Kauffman was moving toward growth: Buy a stock that already has proved it has turned the corner, the stock the value manager has already made a few bucks on. As Kauffman put it, a growth investor is willing to pay a premium for a successful company.

The philosophy took hold and results improved. In 1978, Kauffman made another investment cornerstone more visible. He started Seafirst's Northwest Fund, believing stocks in your own neighborhood are better known and understood than stocks far away. That philosophy continues: At Sirach, as many as a quarter of the 50 or so stocks the company buys for its accounts are Northwest names.

In 1981, Kauffman approached his 40th birthday with itchy feet.

"I was doing the right things, but for other people," he said.

With two other investment advisers, Boyd Sharp and Mike Kunath, Sirach Partners was formed. Sirach is an alternate name to the Old Testament Roman Catholic Bible book, Eccliasticus. Much of the book centers on wisdom. The founders' modesty ruled out using their own names.

About 18 months later, Kunath departed to form another company. Gradually, Sirach added business, cultivating individuals, pension funds and other institutional clients.

Still, by 1985, the sum under management was only about $70 million. That's when Sirach agreed to merge with Flinn, Elvins, Donohoe & Nelson. That firm, organized by Mac Pringle in 1971, had grown to manage more than $400 million by 1985. But Pringle was retired, other partners were seeking change and Sirach was prepared to take a giant step.

In the new organization, Sirach Capital Management, Kauffman became a principal and chief investment officer. The company continues to grow, as cash comes in from corporations, cities and other public-retirement groups, and wealthy individuals. The minimum investment now is $10 million, although Shearson Lehman Brothers brokerage clients can qualify for a special pool at $100,000 an account.

The company employs 24 people. The investment team is 12 people. Five are senior partners and one other soon will be, Kauffman said.

Sirach itself no longer is independent. The principals sold to United Asset Management, a Boston company that owns 24 such units, in 1988.

In the investment game, good results breed new money. Sirach over the long term has outperformed the market, not always hitting home runs, but rapping out a bunch of base hits.

The present investing environment is skittish, Kauffman said. In bad times, stock-only portfolios can fall as low as 70 percent invested. Lately they've been at 85 percent, and the likelihood is they would cut back further, Kauffman said, based on a slower-than-expected economic recovery.

Somehow, Kauffman keeps it in perspective. Managing $2 billion, scores of clients looking for peak performance, two dozen employees counting on continued success to pay the bills - a heady mixture for a former caddie from Everett.

How can one with so much responsibility sleep?

"Generally, very well," the unflappable Kauffman said. "I can't deny there are times when you're doing better and it's more fun. But on a scale of one to 10," he said, his ability-to-sleep quotient would be a nine.

Perhaps some of that peace of mind comes from finding a balance between home and work. Kauffman said he does his best to limit work to 10 hours a day, five days a week.

More peace evolves from helping others. His sister, Mary Schepman of Minneapolis, is retiring from a highly successful stint as a school principal.

"We plan to create a foundation to work with children and senior citizens," Kauffman said. "It's a simple premise - time, talent, dollars, all of us have one of those things to give."

Although his son went to California for college, he isn't far away now. During the summer break, when father and son aren't water skiing, they're in the office, where Jeff, a finance major, is working.

This year, with Jeff away more, Kauffman rediscovered golf. He played the famed Pebble Beach-Spyglass-Cypress Point courses near Monterey, Calif. He also went to Augusta, Ga.

Getting back into the game has fostered a dream.

"I have a hidden agenda," Kauffman said, "to play some of the finest golf courses in the world in the next few years."

That's a long way from a sandy course in Saudi Arabia, or, for that matter, from a position of junior portfolio manager at a Seattle bank.

Profile appears weekly in the Business Monday section of The Seattle Times.