Top-flight investor: George Mairs III

George Mairs III gave money a good name.

Mairs, a dapper, courteous gentleman who was a humble dean of the Minnesota investment community, died last week at age 81.

Mairs was a top-flight investor whose Mairs & Power Growth Fund consistently outperformed market indexes during the past 50 years with a low-cost, low-turnover strategy strongly focused on buying and holding quality Minnesota company stocks.

And, he and his wife, Dusty, quietly gave millions, particularly to St. Paul-area charities, schools and other organizations. However, they eschewed fame, and only in recent years did they authorize executives of the nonprofits to use their names after they were persuaded that if others knew the Mairses were donors it would inspire other giving.

"Money was never that important to George," said Jon Theobald, president of 28-employee Mairs & Power Inc., who knew Mairs for almost 40 years. "He liked being successful, and the record of the fund was wonderful and largely attributable to George.

"He also was proud of being a private, employee-owned firm. The fact that he has been a major philanthropic force really came home in recent years. As we were buying back his stock over the last several years since his retirement, we were never buying stock directly from George. It was from the nonprofits to whom he had donated the stock."

Tom Kingston, CEO of the Amherst H. Wilder Foundation in St. Paul, said Mairs studied schools and nonprofits and other agencies the way he pursued due diligence of companies.

"He genuinely believed in the joy of giving to what he believed were the right causes and those that meant a better future. He said we could use his name to encourage that. Quietly."

Mairs made significant gifts of cash and stock to Wilder, the century-old health and human services organization; the Como Park Zoo, Macalester College, the St. Paul Chamber Orchestra, Presbyterian Homes, Minnesota Medical Foundation, the Indian Head Council of the Boy Scouts, Ramsey County Historical Society and other schools, arts and nonprofits, some of which he also served as a volunteer. The giving will continue after his death.

George Mairs III was born a year before the 1929 stock market crash. In 1931, his father launched what became the Mairs and Power investment management firm of St. Paul. George joined the firm in 1952 after an Army hitch and graduation from Macalester in St. Paul. Mairs, who lived most of his life in St. Paul, raised several children with his wife. They remembered him as a good listener, sometimes iconoclastic thinker and a classic car buff, who also taught them how to change a flat tire for themselves.

He has helped make millionaires out of many investors in his Mairs & Power Growth Fund, which has consistently outperformed market indexes over the last 50 years with a buy-and-hold strategy of mostly Midwestern companies. He turned over the reins of the legendary fund in 2004 to longtime associate Bill Frels, to whom Mairs always extended great credit for its success.

Two years ago, Mairs said: "This credit crisis and market downturn is far more pervasive than anything I've ever seen. We've moved from a nation of investors to traders, it seems. But I have great faith in the American economy."

"I'm on the ledge, but I'm not jumping," Mairs quipped, as shareholders broke into laughter.

He predicted the rebound of 2009 and 2010, although he was displeased with big-money financial manipulators and overpaid CEOs who caused disillusioned investors and employees to break faith with the system.

The Mairs Growth Fund rarely invested outside Minnesota and avoided volatile companies and controversial bosses. He sold off a lot of ADC Telecommunications as its stock skyrocketed during the 1999-2000 technology bubble, which he read in advance. And he avoided controversial performers such as Green Tree and Metris, and UnitedHealth Group several years ago, because he was uncomfortable with the business model or corporate governance, even as the stocks were skyrocketing.

Mairs made a ton of money over the years in outfits like Medtronic, Graco, Donaldson, Wells Fargo, U.S. Bancorp, St. Jude Medical, Ecolab, Valspar, H.B. Fuller and their predecessors. Several national blue chips balanced out the regional portfolio.

"The one advantage we've had is that all the stock in the management company is held by the employees," Mairs said in 2003, as he was stepping away from active management at 75. "There was never any pressure on us to change our style during the technology bubble or any other time. And we were losing some assets under management, primarily in the mutual fund, because we were underperforming the market at the time.

Mairs generally invested in companies that he understood and watched closely, with managers known as good employers and community leaders.

Ben Crabtree, a now-retired stock analyst who knew Mairs for 40 years, called Mairs a shrewd but humble investor with a lot of "common sense, which is not always in great supply in the investment business."

In 2003, Kerry O'Boyle, an equity fund analyst at Morningstar in Chicago, said: "George Mairs is a throwback to a time before the [mutual fund] industry was taken over by marketers and fancy suits. We often wonder why more fund managers don't use a low cost, low-turnover approach that sticks to 40 or 50 really good names."

Mairs and his wife lived the last few years in a modest townhouse. He drove late-model Hondas. He enjoyed fine dining and the fine arts, but he usually conducted lunch meetings at a downtown St. Paul cafe, recalled Kingston. Mairs was always polite, efficient and to the point. He eschewed extravagance and once returned from a rare winter Florida vacation after five days to tell colleagues that, "It was just too hot."

Before his death, Mairs had told Kingston and Theobald, who eulogized him at his St. Paul funeral Thursday afternoon, that he wanted their remarks limited to 10 minutes and he didn't want them to try and be funny. He'd been to too many funerals where the humor didn't work.