RPT-NEWSMAKER-Stanford CIO's fast path to top a red flag

(Repeats story that originally ran on Sunday)

By Anna Driver and Svea Herbst-Bayliss

HOUSTON/BOSTON, March 8 (Reuters) - Laura Pendergest-Holt, who oversaw investments at Stanford Group Co. and is now accused of participating in an $8 billion fraud, had an unusual background for a top executive in the investment industry.

There was no business school degree, no internship at a Wall Street firm or stint as an analyst at a mutual fund company managing billions of dollars. Rather she learned the job of being the chief investment officer at Texas billionaire Allen Stanford's group of companies while working for him.

In the hyper-competitive $10 trillion asset management industry where resumes routinely boast Ivy League degrees and recommendations from firms such as Goldman Sachs, Pendergest-Holt stood out for what she did not have, according to recruiters, analysts and Stanford investors.

"In selecting Pendergest-Holt for this position, Allen Stanford and his deputy, Jim Davis, probably needed someone they could trust and not someone who could pick stocks," said Lawrence Lieberman, senior managing director at Orion Group, an executive recruiter focused on the money management industry.

A lawyer for Pendergest-Holt did not have an immediate comment.

The 35-year old, who ranked as one of America's most senior women in the money management industry, got her start in a position that paid about $1 million a year through a connection made at church.

At a church in her hometown of Baldwyn, Mississippi -- population 3,300 -- Pendergest-Holt met her mentor, Stanford's chief lieutenant Jim Davis, as a teenager. He recruited her to work at Stanford in 1997 after she earned math degrees from Mississippi University for Women and Mississippi State University.

Even in an industry dominated by young hedge fund managers, Pendergest-Holt's rise to the top of Stanford's sprawling financial empire was unusually quick, industry experts agreed.

"I don't consider a degree in math education to be interchangeable with finance," said Cornelius Hurley, a professor and Director of the Morin Center for Banking and Financial Law at Boston University.

"Age alone would not have disqualified her, but typically you would look for someone who had been an analyst somewhere, either on Wall Street or one of the big mutual fund complexes," Hurley said.

QUICKLY MOVED UP THE RANKS

Now that U.S. regulators have accused Stanford Group, including Allen Stanford and Jim Davis, of having run a long-time Ponzi scheme, experts said Pendergest-Holt's main qualification might have been her loyalty.

In a Ponzi scheme, older investors are typically paid proceeds from the funds of newer investors.

"From what it sounds like here, this company may not have wanted a legitimate CIO because that person might have asked a lot more questions and not played ball," Lieberman said.