Funds That Lived by the IPO in '99 Are Dying by Them This Year

Times are so tough for initial public offerings that David Smith, co-portfolio manager of the $67 million (LAGRX Quote)Loomis Sayles Aggressive Growth fund, hasn't bought shares of a newly minted company in more than a month. A year ago, his fund was crawling with IPOs, and its 197% return for 1999 was achieved with significant help from his stash of new offerings.

"I haven't seen anything compelling," says the Boston-based portfolio manager. "A lot of investors have lost patience with companies that aren't expecting to be profitable in three to four years."

Smith isn't alone. Plenty of sizzling technology funds got enormous pops from IPOs during the early days of their public lives. But there haven't been many of those deals recently, and the arid IPO landscape offers few promising ventures on the horizon. Portfolio managers who rode the IPO wave last year and saw their funds post eye-popping returns, are no doubt wondering: "Where will the performance come from now?" ...