(FORTUNE Magazine) – FORGET EVERYTHING you've heard about the high price of success on Wall Street. Keith Gollust, Paul Tierney Jr., and Augustus Oliver -- two former investment bankers and a lawyer, all under 45 -- are living proof that you can earn ridiculous sums of money without working until 5 A.M., ignoring your loved ones, or even raising your voice. Calm and cerebral, these private investors rank among the best-paid people in the known universe: By FORTUNE's estimate, the three personally earned a total of $50 million in May and June. Yet they have plenty of time left over to mow the lawn, play with the kids, and take 50-mile bicycle rides, sometimes during business hours. These smooth operators are best known for Coniston Partners, the investment fund whose 13% ownership of Allegis Corp. turned the troubled travel conglomerate upside down in June. Coniston, by far the largest of the funds they manage, practices what the partners call strategic-block investing, a refined form of financial arm-twisting likely to come in vogue if legislation limits opportunities for old-fashioned hostile takeovers. Coniston makes its money by putting companies ''into play,'' as they say on Wall Street, but there is more to strategic-block investing than that. Explains Gollust, 42, a calculating onetime Princeton math major and the partner who invented the strategy: ''An active stockholder will always have an advantage over a passive stockholder.'' Coniston looks for companies whose shares trade at discounts of 50% or more below what it believes the breakup value of the assets to be, but invests only when it can buy enough stock to demand an important voice in the company's affairs. At present Coniston's most likely targets are very large companies, like $9.6-billion-a-year Allegis, whose shares are mainly owned by dissatisfied institutional investors. (Last year rumor had Coniston accumulating shares of Time Inc., publisher of FORTUNE; the partners, who never bought enough shares to require public disclosure, refuse to comment.) Once its investment is in place, Coniston unsubtly suggests ways that the target company could lift the price of its shares, and the arm-twisting begins. The tactics vary, but the result is often the same. The targets, such as cable-TV operators Viacom International and Storer Communications, go private in leveraged buyouts, are taken over, or are otherwise reorganized in ways that send their stock prices flying, and Coniston makes a fast buck. These deals require intense bursts of effort, often with long empty stretches in between. ''The hardest part of our business is coming up with the next idea,'' says Tierney, 44, a mustachioed Peace Corps veteran who was a managing director at Merrill Lynch before joining Gollust in 1978. Agrees Gollust, who left the investment banking firm of White Weld to go out on his own two years earlier: ''We live by our wits.'' With only ten employees, Gollust Tierney & Oliver operates out of a small suite of offices on Park Avenue. The three partners are contemplative types who do the brain work themselves, sometimes while cycling through Central Park; they pay other lawyers and investment bankers to attend to the pedestrian details. Together they manage a group of five investment partnerships with equity capital that has swelled from $3 million in 1982 to over $600 million as of late June, including the enormous unrealized gains on their Allegis stock. Investors must contribute a minimum of $2 million and never get a dividend; most of the money under management represents the Allegis gain and profits from past deals. Together Gollust, Tierney, and Oliver personally own the largest chunk of that capital -- perhaps $80 million -- accumulated almost entirely from reinvesting their 20% share of the funds' annual profits. Coniston technically consists of three sister funds structured for individual investors, tax-exempt institutions, and foreigners. In addition ^ to Coniston, the partners run a $100-million risk-arbitrage and special- situation fund called Sabre Associates and a railroad boxcar leasing business, and own real estate at a Utah ski resort. Sober, disciplined, and meticulous when analyzing investments, they goof off without guilt. All three take off at least one month a year. The aggressive Tierney finds sufficient spare time between vacations not only to mow his suburban lawn, but to run the local PTA, coach a boys' soccer team, and play on an adult team called the Oldies. Oliver spends roughly ten hours a week on Eugene Lang's I Have a Dream program, in which wealthy people commit to personally help underprivileged children stay in school all the way from grade school through college. Gollust often retreats to a house in rural New Jersey to read books on science (recently The Tao of Physics) and listen to classical music. Among the many traits these men share are charm, vivid intelligence, and a rebellious streak that is rarely more than half hidden. It is most obvious in Gus Oliver, 37, an earnest merger lawyer who gave up a lucrative partnership at Skadden Arps to join the firm in 1984. His blond hair seems to grow longer with each success; these days it is shoulder-length. Explains his wife, Lisbeth, 37, a film producer who married Oliver shortly after their Yale graduation in 1971: ''When I met Gus, his hair was down to his shoulders. All those years at Skadden Arps he wore it short, and he didn't look quite right to me. Now he looks normal again.'' Once the profits from the Allegis deal are counted, Oliver may decide to grow the hair to his waist. Last spring Coniston was eyeing the airline company that used to be called UAL Inc. Its chief executive, Richard Ferris, 55, had bought a diverse assortment of travel companies, such as Hertz and Hilton International, and renamed the company Allegis. Profits were lousy and the stockholders restive. In early April the company issued millions of new shares at a price roughly 50% below most estimates of the company's per-share breakup value. CONISTON POUNCED, buying its 13% of Allegis -- by far the largest holding -- by mid-May. Then Coniston publicly suggested that the company do a complete about-face by briskly selling off everything but the airline and passing the multibillion-dollar proceeds on to investors. Mild-mannered, soft-spoken, and genial though they are, the men behind Coniston did not confine themselves to a polite request that Ferris reverse his cherished business strategy. Nor did they offer to buy Allegis themselves. Instead, Gollust, Tierney, and Oliver began to apply pressure; they call it stirring the pot. They publicly hinted that Coniston might sell its block to United's pilots, who staged a strike in 1985 and now want to buy the airline. Coniston also began a consent proceeding, a legal tactic similar to a proxy fight, through which it proposed to throw out the incumbent directors by shareholder vote. Says Tierney: ''It was final, sudden, and very decisive -- a hard thing for management to deal with.'' Allegis bowed to Coniston's demands in a melodramatic June board meeting well before the vote could take place. The company announced plans to sell off all its travel businesses except the airline and divested itself of its unpopular chief executive. Even the goofy name will go. Coniston's profits from this squeeze play are downright amazing. Allegis shares recently traded at $90. That gives Coniston, which paid an average of about $67 per share, an unrealized gain of over $170 million on an equity investment of $360 million. But the partnership is holding on with the expectation that the price will go still higher. From his home in San Diego, Gollust's father, Max Goldlust, 76, observes these high-stakes proceedings with mingled pride and chagrin. (Gollust, who apparently found his family name difficult to live with, changed it when he was 21.) Says Goldlust, who once headed a painters' union: ''I don't think ((what Coniston does)) is socially useful. My assumption is that any activity that adds to the concentration of wealth does not promote the general interest.'' He still rather wishes his son had become a scientist. Gollust grew up in Euclid, Ohio, a blue-collar suburb of Cleveland. His parents divorced when he was 6, and Gollust spent weekends with his father, an intellectual who eventually went into the retail paint business. Young Keith started earning money in fourth grade, when he took a job in the local library. His aptitude in math was soon apparent. ''We used to have Saturday night poker games among the relatives,'' remembers Goldlust. ''At 12 or 13, he would analyze the odds. He figured the way to win was not to lose -- if the odds are against you, just fold.'' At Princeton, where Gollust won a scholarship, he tired of mathematical theory. ''He always had a practical bent,'' says Tom Amato, Gollust's Princeton roommate. One summer, while working at a Great Lakes shipping | concern, Gollust bet a month's pay, and made his first market killing, on shares of Digital Equipment the day it went public. He also loved to play games -- poker, golf, billiards, darts. Says Amato: ''He likes to get into a game where there's an adversary he can study.'' With a business degree from Carnegie Mellon, he joined White Weld and rose quickly to junior partner. ''In many ways he didn't fit the mold,'' says a former colleague who remembers Gollust's disrespectful attitudes about the Establishment that White Weld represented, ''but people weren't aware of it.'' A decade ago, anyone who succeeded at a prestigious outfit like White Weld usually stayed put. But Gollust quit in 1976 to go into business with Benjamin Jacobson, now 42, another White Weld banker. Jacobson & Gollust began with no business plan, almost no capital, and a single windowless office in the Pan Am building. They played a lot of backgammon in between jobs as freelance investment bankers. SUCCESSFUL THOUGH it became, that partnership broke up shortly after Tierney joined the firm. The son of a General Foods controller, Tierney majored in philosophy at Notre Dame (''Lots of Thomas Aquinas,'' he says). Like Gollust, Tierney married his high school sweetheart. After his Peace Corps stint in Chile, he got an MBA at Harvard -- along with what Tierney calls ''an incredible case of culture shock.'' For a while he seemed stumped about his career, working on a Ph.D. in management at Harvard and helping start a company that assisted inner-city entrepreneurs. Finally opting for money instead of social service, he took a series of increasingly impressive jobs in finance. Tierney became friends with Gollust while working on the reorganization of Conrail, a collection of bankrupt railroads owned by the government. Tierney was Conrail's financial officer, and Gollust, still at White Weld, its investment banker. ''Paul is my best friend,'' says Gollust. Shortly before he quit, Gollust helped Tierney get a job at White Weld. Not long after Merrill Lynch bought White Weld in 1978, Tierney joined Gollust a second time. Jacobson went off on his own. If Gollust and Tierney are much alike, Oliver, who had worked for them on several deals while at Skadden Arps, is different from both. He grew up privileged in Virginia and Germany, where his father worked for the CIA. ''I never asked him what he did,'' says Oliver. He attended a boarding school in Germany from the age of 11, an unhappy experience, and then, like his father, grandfather, and uncles, went on to the St. Paul's School and Yale. He goofed off at Yale -- this was in the late 1960s, remember, when getting ahead was unhip -- but graduated summa cum laude from American University law school in Washington. He made partner at Skadden Arps in seven years, a normal trajectory. Says a friend from Skadden: ''The thing that distinguished Gus was his self-confidence. He was less anxiety-ridden about making partner than anyone I have ever seen.'' Coniston's returns have averaged 50% a year since the investment fund was formed in 1982, nearly three times the return on the Standard & Poor's 500- stock index. One can view this immodestly successful little business in one of two ways. Either Gollust, Tierney, and Oliver represent a new and particularly genteel variety of shareholder-rights activist, or they are professional bullies not fundamentally different from corporate raiders and greenmailers. Both assessments have merit. Coniston accepted greenmail in 1984 and, despite an attempt or two, has never bought a company. But in its assaults on corporations, Coniston probably has attacked more bad managements than good. Like most Wall Streeters, Gollust, Tierney, and Oliver are quick- buck artists almost by definition. But as Oliver says, ''I never met anybody who wanted to make a slow buck.''

WHEN ASKED ABOUT the social value of their work, the three chant the familiar mantra about entrenched managements and market efficiency that all devotees of T. Boone Pickens know by heart. Press Gollust further and he argues not that he and his partners are a force for good, but that they do no harm. ''Part of our job is to understand the environment in which we're working,'' he says. ''Ferris failed to understand his environment, and it cost him his job. Institutions tend to have a short-term orientation -- this country has a short-term orientation. Obviously we are getting our brains beaten in by Japan, which has a long-term orientation, and I believe it would be better if America had a long-term view. But we don't make the rules, we play by them.'' Considering what they do for a living, Gollust, Tierney, and Oliver enjoy an enviable reputation in the New York investment community, where they are well known. Not only are they judged honest -- an attribute no longer taken for granted in their business -- but they also are respected for backing up their judgments with their own money. All three partners keep the overwhelming bulk of their net worth (their seven homes and the odd Jaguar XJ aside) tied up in their partnerships. Says Oliver: ''We're not doing this just to manage other people's money till it's all gone, as Woody Allen would say.'' They share big risks with their limited partners. Because its strategy is based on accumulating huge blocks of individual stocks, the partnership does not have enough capital even now to diversify its portfolio. In addition to its Allegis shares, Coniston owns about $30 million of Gelco Corp., a company that leases transportation equipment, and little more. Margin debt adds to the risk. In the case of Allegis, roughly one-third of the $520 million Coniston invested last spring was borrowed. The leverage enabled Coniston to buy Allegis stock worth more than all the equity capital under the partners' management, greatly boosting returns as the stock price rose. Had the price of Allegis shares gone down instead of up, however, Coniston's losses would have been similarly magnified. Says Mac Hawley, scion of a Minneapolis munitions family who has invested some $3 million of his clan's money with Coniston: ''There's a lot of faith involved in being one of their limited partners.'' Oliver and his partners argue that Coniston's strategy carries low risks. ''We're really buying a company's underlying assets at a discount to their market value,'' says Oliver. ''The spread between our cost and the underlying value is our protection as well as our potential reward.'' So far the partners' value judgments have usually proved correct, and even their worst calls apparently have not been disastrous. Coniston lost less than $1 million on two unfortunate investments in savings and loan companies, its only publicly reported stumbles. The partnership actually made a small profit on a horribly ill-timed 8.5% stake in NL Industries, an oil services specialist, which Coniston bought just before a steep drop in oil prices sideswiped the company in 1986. ''They do their homework better than almost anyone,'' says Hamilton James, head of mergers and acquisitions at Donaldson Lufkin Jenrette, who worked for Coniston on the Storer deal. On Wall Street, it seems, doing your homework can make you rich -- even if you like to play hooky.

CHART: STRATEGIC BLOCKS THAT PAID OFF BIG

TARGET COMPANY AMOUNT GAIN AVERAGE OUTCOME FOR INVESTED; HOLDING TARGET COMPANY DATE PERIOD

Constar $6 million $0.7 million 6 months Paid greenmail; still International 10/84 independent.

Cyclops $15 million $9 million 18 months To be acquired by Dixons 12/84 Group PLC.

Storer $42 million $39 million 13 months LBO by Kohlberg Kravis Communications 3/85 Roberts; major asset sales.

NL Industries $72 million $6 million 5 months Harold Simmons bought 1/86 51%; asset spinoffs possible.

Viacom $39 million $12 million 2 months Acquired by National International 10/85 Amusements. $132 million $49 million 2 months 9/86

Gelco $52 million $17 million 5 months Company bought in 46% 10/86 of own stock; still independent.

Allegis $520 million $172 million 2 months Major asset sales 3/87 planned; still independent.

CREDIT: NO CREDIT CAPTION: The table lists Coniston's publicly disclosed investments since October 1984. The partners made two forays into Viacom stock. In the case of Gelco, Coniston sold part of its holding to the company in a tender offer and then bought more stock. It still held shares in Gelco and Allegis in late June. DESCRIPTION: See above.