On the morning of September 11, 2001, Dan Chung attended a meeting in Midtown Manhattan with the management of Tyco Industries. He was fortunate. By day’s end he was one of the few remaining New York employees of Fred Alger Asset Management, located on the 93rd floor of the World Trade Center.

When the planes crashed into the twin towers, Fred Alger lost 35 members of its 55-person headquarters staff. Mr. Chung recalls, “It was a tremendous blow. It took the core of this firm, including almost the entire investment management and research teams in the New York office. I was the most senior person to survive.” Mr. Chung, Fred Alger’s son-in-law, was then 39 years old. He took over as Chief Investment Officer soon after September 11. Today he also serves as president of the firm.

One of the casualties of the attacks was David Alger, CEO of the prestigious firm founded by his brother Fred in 1964. Under both brothers’ leadership, the company had built an impressive record investing in growth stocks, and had amassed $15 billion under management. In 2001, their Capital Appreciation fund was awarded the Lipper Performance Achievement Award for the highest ranked fund in its category over a five-year period.

The excellent performance history of the firm kept it alive. So did the Alger family’s dedication. Fred Alger, who had passed the baton to his younger brother some years earlier, returned to run the firm. He had been living in Geneva, but was in New York on September 11. Thankfully, he was not making his customary headquarters visit on that morning.

Mr. Alger was not the only family member that came to the rescue of the firm. Another son-in-law, Zachary Karabell, an accomplished author, stepped up as well. While finishing a book about the Suez Canal at night, he immersed himself in the firm, and now co-manages the firm’s China-U.S. Growth Fund, provides economic commentary, and heads up marketing.

To be sure, the past few years have not been easy. Fred Alger set up a management committee to run the firm’s day-to-day activities, which quickly justified the skepticism such a solution normally generates, and personally bowed out in 2002. Because the late 1990s had seen great growth stock returns, the firm had geared up for a significant sales and marketing push, and had hired people who were suddenly redundant.

“Finally, at the beginning of 2003, we brought in a board member to be executive managing director, a title we’d never had before,” Mr. Chung said. “We had to reduce the work force. Winning new clients was very tough, until now.”

Assets under management sank, and despite some recovery, are still at only $9 billion today. Though clients were initially supportive, the poor growth stock environment in 2002 and 2003 ultimately resulted in some redemptions, especially from insurance clients. “The changes in the insurance business, all the mergers and consolidations, made our situation difficult,” Mr. Chung said. “Though clients were loyal, when it came down to choosing which asset managers would be kept on, we usually lost out. It certainly didn’t help that for the past five years value investing has been in favor.”

Further complicating the firm’s recovery was the revelation that certain funds had engaged in market timing. The firm reached an agreement in principle with the Securities and Exchange Commission in June, and is optimistic that resolution of related lawsuits will follow.

Today, the pendulum may be swinging back in favor of growth. Mr. Chung is enthusiastic about the sector’s prospects. “Growth stocks are unusually attractive today. We look for companies that are able to grow at above-average rates, in the classic way, from new products and organically. There are a lot of bargains in the market, but especially in the growth sector.”

A shift in favor of growth, and good performance numbers, means that four of Alger’s five divisions are recording positive sales, and the company has recently had some significant client wins.

The company has hired a new chief operating officer. Hal Liebes, who was formerly at Credit Suisse Asset Management and Amvescap, was attracted by Mr. Chung’s energy and passion for the business. Mr. Liebes rattles off Mr. Chung’s credentials — Stamford undergraduate, law degree from Harvard, Supreme Court clerk — and says those are nothing compared to his loyalty and commitment to the family, and the firm.

He also was impressed that Alger has stayed true to its investment philosophy, despite the tough times. He feels they are poised to turn the corner; it is his job to make sure the systems are in place to make the most of an upturn. “We should be best in class in every process,” he said.

He recently orchestrated a consolidation of the firm’s sales group, some of whom had been in New Jersey, to the New York office in Chelsea. The firm is reluctantly shrinking the New Jersey operation. The back-up systems in the Morristown facility, put in place after the first World Trade Center bombings in 1993, kept them in business after September 11.

Mr. Karabell has also taken on growing responsibilities. Like Mr. Chung, he is no slouch in the education arena, having acquired an undergraduate degree from Columbia, and advanced degrees from Oxford and Harvard in international relations. As someone relatively new to the business, Mr. Karabell may have an advantageous perspective. “If anything good came out of 9/11,” he said, “it may be that we’re much more focused on building this company as a business.”

In his view, one of the biggest challenges is to broadcast the excellent performance record the new team is compiling, and to bring in assets. “We have an underutilized engine,” he said. His job is to fix that.

Certainly the firm’s fortunes will rise and fall primarily on its investment results. This year has been mixed, with the small-cap and mid-cap funds and the China and Health Sciences funds doing extremely well and the large-cap funds falling short of their benchmarks. However, nearly all the funds rank well over three and five years, with the mid-cap fund being number one in that category. It is in the small and mid-cap cap space that the company is making its most aggressive marketing pitch, and where it has won some significant new accounts.

Fred Alger’s survival was not at all certain five years ago; now the firm is hiring, and prospering. From many perspectives, the story of Fred Alger is really a story of those winning the war on terror.