Cornerstone Capital Management, Inc., a Minneapolis-based investment management firm, announced today that it has been awarded a "Hire" ranking from the Russell Investment Group, the world's largest institutional money management consultant.

The recommendation, the highest of Russell's four-tier system, culminated a nine-month long evaluation by Russell, which involved a series of face-to-face interviews as well as extensive analysis of the firm's performance track record, performance attribution, and trading history.

"I'm delighted that we were able to earn the confidence and endorsement of such a prestigious firm as the Russell Investment Group," said Andrew S. Wyatt, chief executive officer of Cornerstone. "In my 21 years in the investment industry, this was the most thorough due diligence process I or any of my colleagues had ever experienced, and the process served to validate our work, our track record and the superb team of analysts we've put together here at Cornerstone."

Russell, which is known worldwide for its Russell market indices, makes investment manager recommendations to its worldwide base of institutional clients, such as pension and endowment funds, with more than $2.4 trillion of assets. The firm ranks managers on a four-tier basis: Four represents Russell's recommendation that the manager be hired; three is a "retain," if the investment firm is already managing money; two designates "monitor," and one "dismiss."

"Cornerstone is one of a small group of domestic stock market large capitalization growth managers in the U.S. who have Russell's 'hire' rating," said Thomas G. Kamp, Cornerstone's president and chief investment officer. "I can't say how proud I am of the team of investment professionals we've put in place over the past year. The quality of our investment research and the investment results are exciting."

About Cornerstone Capital, Inc.
Cornerstone Capital Management, Inc. was founded in 1993 in Minneapolis, Minnesota and is an SEC registered investment advisor. Cornerstone is composed of three divisions: Institutional Investment Management, Private Wealth Management, and the Keystone Mutual Funds.

Investment services include management of US Large Cap Growth equities, tax-exempt and taxable fixed income, and balanced portfolios.

About Russell Investment Group
Russell Investment Group, a global leader in multi-manager investment services, provides investment products and services in 44 countries. Russell manages more than $190 billion in assets (as of Dec. 31, 2006) and advises clients worldwide representing more than $2.4 trillion. Founded in 1936, Russell is a subsidiary of Northwestern Mutual and is headquartered in Tacoma, Wash., with additional offices in New York, Toronto, London, Paris, Singapore, Sydney, Auckland, and Tokyo.

A number of Minnesota market-watchers had been thinking that stocks were due for a pullback, but not a more-than-400-point tumble in a single trading session.

"I think it got a little spookier than people wanted by the end of the day," said James Paulsen, chief investment strategist for Wells Capital Management.

David Chalupnik, head of equities for FAF Advisors, the asset management arm for U.S. Bancorp, believes a market downturn was inevitable. But the overall U.S. economy remains strong, he said. Still, he worries that investment firms remain vulnerable to rising defaults in subprime mortgages, which many believe have exacerbated the sell-off.

The subprime mortgage market "was the straw that broke the camel's back," said John Beurerlein, chief economist for Marquette Financial Companies Inc. in Minneapolis.

Until now, investment banks and asset management firms have enjoyed strong profits, thanks to a healthy stock market and cheap money that financed a seemingly endless supply of mergers and other deals. The financial sector was one of the hardest hit on Tuesday, although all sectors of the market were slapped.

Some investors viewed the market's fall as an opportunity.

Money manager Lee Wenzel was too busy looking for stock bargains to be interviewed while the market was still open Tuesday afternoon.

"That gives you an idea of what I'm doing," said Wenzel, principal at Eden Prairie-based Wenzel Analytics.

The concept of buying low and selling high isn't novel. But it's tough for individual investors to look at a significant drop in the stock market as a good thing.

Tony Vitelli, 25, who described himself as an average investor with a 401(k) account, frequently hears co-workers discussing their portfolios' performances over lunch. He first heard of the market's free fall from their unhappy tones, but he didn't join in. "I don't get too excited when it goes up and don't get too excited when it goes down. I just figure over time it will go up, so why stress?"

That's pretty much RBC Dain Rauscher financial consultant Darla Kashian's message to her clients, who typically aren't planning to tap their stock investments for a decade or more. Still, she spent a couple of hours today reminding her clients to keep a long-term perspective.

"Everyone can handle volatility in an up market," said Kashian, who suggests that a sharp drop is an opportunity for investors to evaluate if they are truly comfortable with market fluctuations.

Whether the market is headed for more down days is anybody's guess. Paulsen expects it to hit bottom and resume an upward climb before long.

"I think this is more a sharp correction in an ongoing bull market rather than a bear market," he said.

Tom Kamp, portfolio manager of Minnesota-based Keystone Large Cap Growth Fund, expects continuing pressure on emerging market stocks as investors sell them and move into safer havens, such as big, domestic companies like those is fund buys.

"The sky's not falling, but there is a change in the risk premium around the world," he said.

Investors in search of stocks on sale should "let this thing form a bottom," Paulsen said. "Then maybe I'd look around and see what's really beat up and maybe pick away at it. Because I think [the market's] going to go up again before the year's out."

After a quiet launch in August, Cornerstone Capital Management Inc.'s first mutual fund has already attracted $32.9 million in assets. With those initial investors on board, executives at the firm are ready to start publicizing the fund, called the Keystone Large Cap Growth Fund.

The new fund invests in a limited number of big U.S. companies. It will be available to investors through Charles Schwab and Fidelity Investments.

Cornerstone's new mutual funds arm is one of several changes at the Minneapolis firm, which boasts assets under management of about $125 million.

Since the end of January, Cornerstone has grown from four people to 15. Much of the increase stems from the addition of Thomas Kamp, who joined the firm as chief investment officer in February.

"In my desire to build Cornerstone into a world-class firm, I knew I needed a world- class chief investment officer," said Andy Wyatt, president and CEO of Cornerstone. "That's when I approached Tom."

Kamp had worked at New York-based Alliance Capital Management Corp. and was the manager of the firm's Minneapolis office. He managed more than $9 billion in assets.

Wyatt helped start Cornerstone in 1993. Until Kamp joined, the firm focused on wealth management for individuals and small institutions.

In addition to the mutual fund, Kamp's experience has enabled Cornerstone to extend its investment management services to larger institutional accounts of $10 million or more.

Said Wyatt of all the changes: "I think of us as a 13-year-old startup."

Firm adds former Alliance Capital Growth Manager of $9 billion in assets

Cornerstone Capital Management, an Edina-based investment management firm, announced today that Thomas G. Kamp, most recently a member of the large capitalization growth team at Alliance Capital, had joined Cornerstone as its chief investment officer and a managing director.

Kamp, 44, brings to Cornerstone 13 years as a portfolio manager, as well as experience as a venture capitalist and entrepreneur. Prior to joining Cornerstone, Mr. Kamp was a Senior Vice President and portfolio manager at Alliance Capital Management Corporation within the Large Capitalization Growth Equity Group, and also the manager of Alliance Capital's Minneapolis office.

"We are delighted that Tom will be joining our firm to lead our investment management efforts," said Andrew S. Wyatt, president and CEO of Cornerstone. "Tom brings a national reputation and a vast amount of investment experience to our firm. He will play a critical role in elevating our investment process to a new level."

As a portfolio manager, Kamp had the responsibility for more than $9 billion in assets under management, including the AllianceBernstein Large Cap Growth Fund, the Alliance Premier Institutional Fund, the ACM Global Investments – American Growth Portfolio (Luxembourg based), the ACM Funds, Inc. – American Growth Fund (UK based), and the Alliance American Premier Growth Fund (Japanese based), as well as more than $5 billion of assets from public and private institutions and high net worth individuals around the world.

"I'm very excited to join Cornerstone in a role in which I hope to help the firm grow and prosper," Kamp said. "Andy and his team have already built a great organization and developed an excellent investment process. I look forward to playing a role in helping Cornerstone realize its full potential as a major force in the investment management business for both individuals and institutional investors."

Prior to joining Alliance Capital, Kamp evaluated and participated in funding emerging companies for Minneapolis-based IAI Venture Capital Group from 1991 to early 1993. Prior to that, Kamp founded and successfully sold Premier Computer Corporation, the world's largest computer disk drive remanufacturing organization and an outgrowth of a business plan he formulated while at Northwestern's Kellogg Graduate School of Management. Kamp earned an MBA with a specialization in Accounting from Northwestern University and a BSME with a minor in Applied Mathematics from Southern Methodist University. He is a CFA Charterholder.