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- Daniel Chung became chief investment officer of Fred Alger Management after 9/11 because he was the most senior of the survivors at the firm, which lost 35 people in the attacks.
- In the 25 years since, Chung has done more than just rebuild Alger, with assets ballooning to more than $47 billion this year.
- The flagship Alger Spectra Fund (SPECX) ranks in the top quartile in its category on a three-, five- and 10-year basis.
Dan ChungCourtesy: Fred Alger Management
Daniel Chung, the CEO and chief investment officer at investment firm Fred Alger Management, survived the Sept. 11 attacks on the World Trade Center by chance.
That morning a quarter century ago, the then-tech analyst started his day at the Intercontinental Hotel in Midtown Manhattan, searching for answers on why a key stockholding hadn’t been performing well. The company’s chief executive was set to make a presentation that day.
“I was running late, so I went straight to the meeting,” Chung said. “The meeting starts. CEO walks out. He’s barely started, and somebody comes from, I guess, the hotel or the AVs — you know, the audiovisual staff – and hands them a note.”
“He looked at it, and he said, ‘I’m not sure we can continue,” Chung added. “There’s been a plane or something at the World Trade Center.’”
Alger’s offices were on the 93rd floor of One World Trade Center, the North Tower, the first building hit, at 8:46 a.m.
Those gathered in midtown didn’t immediately grasp what had just happened. Everyone’s first instinct was that it was an accident. Minutes later, when the second plane hit the South Tower at 9:03 a.m., a silence fell over the room. The meeting was canceled, and people started lining up to use the one landline outside the conference room when they found that their cell phones didn’t work.
None of the calls to offices downtown, in lower Manhattan, went through.
When Chung left the hotel on 42nd Street, cars had stopped. People, unmoving, stared down Lexington Avenue, where a cloud of smoke and debris obscured the view to lower Manhattan as the towers burned, and then collapsed. Chung isn’t sure how long he stood there, before realizing he had to start moving uptown.
After contacting some other Alger colleagues, he spent the rest of the day with his team spread out across the city’s hospitals, with photos of co-workers. Some went to St. Vincent’s Hospital in Greenwich Village. Others to Bellevue. Everywhere, people looked for survivors, anxiously waiting for ambulances to start pulling in.
“By midday or later, you had thousands and thousands of people outside these hospitals, putting up signs and waiting, just waiting,” Chung said. “I remember, by evening, you’re hoping to see one ambulance. I don’t actually recall seeing any that day.”
Chung eventually got back home to his wife and children in Brooklyn long after midnight.
He later learned that the attack on the North Tower claimed 35 of his colleagues — including then-chief executive David Alger.
Most senior survivor
Chung was named chief investment officer of Alger in the immediate aftermath of the tragedy. He was the most senior of the survivors, and founder Fred Alger, Chung’s father-in-law, came out of retirement to task him with rebuilding the firm.
Chung had available to him the firm’s huge capital account, meant to help during times of market crises. And he had to move quickly to allay fears from clients who worried about their assets, as well as the future of the firm.
Preparations made by Alger’s chief technology officer Michael Howell, who died on Sept. 11, allowed Alger to resume operations on Sept. 13. Howell had ensured that a backup recovery center in Morristown, New Jersey would be able to support operations for the firm. The center had a full trading desk that replicated what Alger had at the trade center, right down to the order of seats for portfolio managers.
“It was above gold standard,” Chung said. “Platinum standard.” Their client records were intact. So were proprietary trading and other models.
Within days, Alger was able to hold a conference to update clients, consultants and the securities exchanges on the status of the firm.
Flowers are left at the September 11 Memorial and Museum, which is located on the land where the Twin Towers once stood before they were destroyed in the attacks on September 11, 2001 in New York City.Spencer Platt | Getty Images
In the 25 years since, Chung has done more than rebuild Alger. Known for one of the best performing mutual funds of the tech boom of the 1990s, Alger has seen its assets balloon to more than $47 billion, according to the firm. The flagship Alger Spectra Fund (SPECX) now holds $4.5 billion in total assets.
In the last several years, the fund manager has done even better, thanks to Chung’s confidence in the artificial intelligence trade. SPECX was in the top 4% of funds in its category last year, and the top 2% in 2024. And according to Morningstar, the fund also ranks in the top quartile in its category on a three-, five- and 10-year basis.
Alumni return
Chung, 64, succeeded in part by eschewing the advice of consultants soon after the terrorist attacks.
Many encouraged the Harvard Law graduate who had once clerked at the Supreme Court to poach star portfolio managers from other firms. But the analyst-turned-executive decided honoring the legacy of the firm and the lives lost on Sept. 11 meant upholding Alger’s philosophy and culture. Chung sought out successful alumni who had cut their teeth at Alger, rather than assemble a slap-dash team cobbled from disparate personalities. He wanted to keep the spirit of Alger alive.
“I became dedicated to the idea of not only rebuilding Alger and staying in business — but rebuilding Alger,” Chung said. “We had been the best.”
Many alumni heard the call and felt it was their duty to help. Among them, Teresa McRoberts, who covered healthcare, and David Hyun, who left his post at Oppenheimer Funds. Small cap portfolio manager Jill Greenwald approached Chung at the memorial service for Ginger Risco, once a secretary at Alger who went to night school at Columbia University before asking Fred Alger for an analyst position. Risco, too, died on the 93rd floor.
“Jill came up to me and said, ‘I heard you’re asking Alger alumni to return,’” Chung said. “I said yes, and she said something like, ‘When do I start?’”
‘Positive Dynamic Change’
Today, Alger is as bullish on tech as it was at inception in 1964.
Fred Alger was known for a growth-oriented style of investing that put him squarely at odds with value investors like Warren Buffett. “You can go broke buying cheap stocks,” Alger once joked. Instead, Fred had admired famed Fidelity fund manager Gerald Tsai who had pioneered picking stocks on the basis of accelerating revenue growth. By the 1990s, Alger’s track record of finding companies in high growth sectors earned plaudits from Wall Street, including Intel in 1977; Apple in 1984; and Microsoft, by 1990. By 2000, Barrons named Fred Alger to its All-Century Team of legendary investors.
Investing in “positive dynamic change” remains a core tenet of Alger’s investment philosophy, leading the firm to invest early in the artificial intelligence trade. Chung said naysayers worrying about a future oversupply of datacenters and claiming the group’s soaring prices equal a bubble, are missing the fact that there is a shortage of computing power right now.
Today, Nvidia is the top holding of the Spectra fund, representing 14% of assets as of June, according to Morningstar. The dominant AI chipmaker is up 17% this year, disappointing only when compared to stupendous returns since late 2022 and Nvidia’s spectacular earnings growth. Chung expects that Nvidia will once again claim a higher-than-market price-to-earnings ratio.
CrowdStrike is another high-conviction bet that Chung thinks will maintain “very high rates of growth” for several years, given the importance of cybersecurity with the advent of AI. Chipmakers Western Digital and Micron that will continue to benefit from the need for memory. And Nebius Group, a top 10 holding in Spectra, is a neocloud company that Chung identified early as a winner in the space; it’s nearly tripled this year.
“We are still in the early years of what will be probably almost a full decade” of AI-driven growth, said Chung, who graduated Stanford as an undergrad. The AI move is “still very early to me. This feels more like 1995, I think, than, say, 1999.”
‘A lot of good in this world’
Alger finally emerged from the darkest days of 9/11 larger than it had ever been. The tragedy shaped the firm’s emphasis on charitable giving, marked this year by a fundraising golf tournament in May.
The firm has launched an Alger 35 ETF, formed by the 35 of the the firm’s highest-conviction investment ideas in honor of the 35 colleagues who died on 9/11. The firm donates a portion of its management fees from the fund to charities in memory of David Alger and their colleagues. Chung said even the youngest analysts at Alger present ideas to him for the ETF, which is gold-rated by Morningstar.
The recovery has also shaped Chung’s optimistic view toward the future, even at a time shaped by social polarization, fear of artificial intelligence and another American war in the Middle East. Chung remains optimistic that the country will be able to move forward.
“Look at how well New York has done. Look at how well America has done, actually. And look at how well Alger recovered,” Chung said. “I think it’s a reminder. I’ll quote the ‘Lord of the Rings’ hobbits a little bit. It’s a reminder that there’s a lot of good in this world.”
“A lot of good in people, in our institutions, certainly in this city and in this country,” Chung continued. “And it is because of that — that perseveres and goes on, even as there’s a lot of noise and uncertainty and worry — that we have recovered. We’re here today.”
