(FORTUNE Magazine) – Bucky Badger has had a rough year. After a decade of winning ways, the University of Wisconsin's mascot has watched his football team slip to the bottom of the Big Ten this season. And on a recent Saturday afternoon in Madison, the Wisconsin Badgers are getting beaten up again, this time by the University of Illinois Fighting Illini (not exactly a powerhouse either these days). But there is one group in the crowd of 76,000 red-clad fans that seems unfazed by this drubbing. "I'm used to this," says Wisconsin alum Tom Madsen (business school class of '79). "The team was terrible when I was here."

True enough--when Madsen was in school, Wisconsin football ranged from mediocre to mangy. Yet there may be another reason for Madsen's nonchalance. Perhaps it's because he is a member of an order of Wisconsinites more prideful and with a better track record than the football team. Madsen is a graduate of the University of Wisconsin Business School's elite Applied Security Analysis Program (ASAP), a sort of money-management boot camp in which students run real, live stock and bond portfolios. As it turns out, ASAP and its predecessor program have produced an extraordinary number of high-profile, successful fund managers and financial analysts, including the likes of Brandywine fund manager Foster Friess, Oakmark fund manager Bill Nygren, and Strong Financial founder Dick Strong.

Every other fall, ASAP alumni gather in Madison for a reunion. They attend seminars, swap war stories, network, and engage in more than a little reveling. What better time to visit ASAP and figure out what makes the program tick? I've come to find out what's in the water in Wisconsin--or perhaps more aptly, what's in the beer. Which explains why I am sitting with Madsen and dozens of other ASAPers at this football game, groaning along with them as Illinois scores yet another TD.

Did I mention that the ASAP crew and I went out partying the night before the game? Well, we did. Took over the Plaza Tavern and Grill, as is the tradition. Quaffed a few Leinenkugels. Had a famous Plaza burger. Even did tequila shooters with B-school dean Mike Knetter! (Is there anything scarier than a bunch of middle-aged men at a reunion?) But I also spent time listening to the guys tell me about their program. (There are a number of younger women alumnae, but until recently it was predominantly a male domain.) "It's not so much an investing philosophy," Ray Zemen (class of '73), a Chicago hedge fund manager and sometime student advisor, tells me over the din. "It's more like we pass on accumulated real-life experience to the students."

That's an intriguing paradox of the ASAP program. You would think that with such an impressive roster of alumni, the school would have a strong and singular investing philosophy, a la the University of Chicago's free-market, supply-side department of economics. But it doesn't. For instance, the program's most successful younger alum, Oakmark's Nygren (class of '81), is a disciplined value investor straight from the Warren Buffett school of buy and hold. On the other hand, Dick Strong (class of '66), emperor of Menomonee Falls, Wis.--who built Strong funds into one of the nation's biggest fund families, with $21 billion under management, according to Morningstar--made his mark with growth funds. ASAP has spawned numerous bond managers and REIT investors as well. (This provides more proof that Wisconsin and its natives are far from unilateral or bland. Yes, the state produces 26% of the nation's cheese--350 varieties! But Wisconsin also leads the nation in cranberry and ginseng production. And it is the state that gave us Red baiter Joe McCarthy, as well as the progressive Bob La Follette.)

You could argue that, if not quite plain vanilla, deep down the University of Wisconsin Business School--at 102, one of the nation's oldest B-schools--is grounded in a way that the business schools at Harvard and UCLA are not. And no one exemplifies ASAP's rootedness more than professor emeritus Stephen Hawk (class of '63). Hawk, a mild-mannered, round-faced fellow, helped found the program in 1970, "the same year Monday Night Football started," he remembers with a grin. Though he retired years ago, he is still close to the soul of the program. "We are old school," he says without apology. "We try not to be sloppy or jump on the next hot stock."

Students loved him. "Steve Hawk was why I came to the program," says Nygren. "I'm from Minnesota, and I was working at General Mills. I was thinking about going to Stanford or the University of Chicago for my MBA, but a General Mills executive suggested I drive down and meet Steve. I did, and I was terribly impressed. What's great about Steve is that he has a Ph.D. in finance, and he was also part of an investment-management firm. He was both theoretical and practical." Hawk, students say, encouraged them to follow a Joseph Campbell-like path when it came to choosing their investing style. Follow your bliss, Hawk urged them. "He knew that I was a value guy," recalls Nygren, "so he encouraged me to read Graham and Dodd and to read about Buffett."

Another attribute of Wisconsin attracted Nygren: dollars. "We got to run real money," he says. "Stanford had the brand, but the money was pretend." Today students at ASAP manage a portfolio of $12.5 million. Some $10 million of that is from the university's trust, kept in bonds. The remaining $2.5 million is from gifts, half a million of which is in REITs. The balance, $2 million, is in individual equities. Managing that money is a job the students take seriously. "I live to run the portfolio," says Nick Zimmerman, one of 11 current students. "From 8 a.m. until 10 at night sometimes. Weekends too." Nowadays several other schools--including the University of Texas and the University of Virginia--allow students to run real-dollar portfolios, but back in 1970 it was a novel concept.

"The original idea to give students money actually goes back to the early 1950s," says Ab Nicholas (business school class of '55), whose Milwaukee-based Nicholas Family of Funds has some $3.5 billion under management. Nicholas came to Wisconsin from Rockford, Ill., to play basketball (he has since helped bankroll the university's Kohl basketball arena to the tune of $10 million). He knew nothing about stocks or investing, but he took a course offered by Steve Hawk's predecessor, Frank Graner, and became hooked. Former students describe Graner, a short, dapper chain-smoker, as an inspirational teacher. "He also believed in investing in common stocks before it was fashionable--that's for sure," says Nicholas. Hawk, who came to Wisconsin to study engineering, also fell under Graner's spell. He switched his major to finance in order to study under Graner full-time. "Frank Graner tried to get real money for the students to work with, but he couldn't get it past the regents," says Hawk.

It wasn't until 1970 that the program was actually funded, by which time Graner had retired and Hawk had been asked to run the show. Brandywine's Friess (class of '62), a native of Rice Lake, Wis., also studied under Graner and recalls the process of funding the program. (Friess, a big supporter of GOP candidates and conservative causes, once offered the local music festival in Jackson, Wyo., where he has offices, a $40,000 donation if it would un-accept $10,950 in government aid.) Anyway, Graner had done some investing work with the Brittingham family, a wealthy Wisconsin clan. "[Baird Brittingham and I] flew to Madison to introduce the concept to Steve Hawk, who subsequently coordinated students into two competing teams," says Friess. "One was called Badger, and the other was called Wisco. Each team was given 10,000 real dollars to invest, as opposed to managing a paper portfolio." Soon thereafter Brittingham gave the program a lump sum of $100,000.

During the past 32 years some 350 students have passed through the program, and almost half have come back for the reunion this weekend. They are greeted by Mark Fedenia (class of '77), the current ASAP director, who carries the torch passed on by Steve Hawk. "There's a lot of pride here," says Fedenia, who looks as if he could have played tight end for the Badgers but in fact was a black belt kickboxer. "The students make presentations to an oversight committee that includes these alumni," he says, looking around the hall, and if the students lose a ton of money at the end of the year, "the alumni would be the ones I have to ask to make it up."

On Friday afternoon the event gets into full swing, and the group settles in for presentations by money manager Steve Leuthold (he attended Wisconsin as an undergrad for a while but "followed some damn girl up to the University of Minnesota and transferred") and former U.S. Secretary of State Lawrence Eagleburger (now he's a Badger!). By cocktail hour, things really pick up. "Do you drink?" an alum asks me before dinner. "Affirmative," I tell him. "Good," he says. "Sit at my table. What'll you have?" The opening remarks are given by University of Wisconsin at Madison chancellor John Wiley, who begins with a somewhat windy welcome to the alumni, congratulating them on their success. "Shut up!" someone suddenly yells from a front table. It's a joke, and everyone laughs, including Wiley. But still, the meaning is lost on no one: You have entered a no-b.s. zone.

At dinner there are plenty of good stories to go with the beef Wellington, red wine, and Wisconsin amber. "There's an important but unrecognized point about the program," says Phil Matthews (class of '73), who works for the giant bond company Blackrock in New York City. "You have to do all the back-office stuff. That's real work. We had to settle the trades. I remember getting a check from Anchor Savings & Loan and walking it over to the Milwaukee Co., a local brokerage. But it's a labor of love." Madsen, who's based in London and heads up the equities piece of UBS's global asset-management business (which has about $200 billion--including some assets of the Green Bay Packers!--under its roof, making it one of the largest such operations in the world), nods his head. "We had 11 guys in our group in 1979, and I'm still in touch with seven of them. You live with these guys every day."

Yes, it's a close-knit bunch--Madsen got his job in part through an ASAP connection and has hired a dozen or so graduates over the years--though like any family, it's not without dysfunction. Two of the program's most famous and wealthiest alums, Nicholas and Strong, aren't on speaking terms. They met in Milwaukee in 1966 and a year later set up Nicholas & Strong, a money-management firm. In 1973 they had a falling out for reasons neither of them will discuss, and Strong left to form his own firm. They reportedly haven't spoken since. (Maybe that's why neither of them came to the reunion.)

After dinner it's off to the aforementioned night at the Plaza bar, where I come to fully appreciate the notion that these folks work hard and play hard too. Tom Rattmann (class of '79), CEO of Columbian Financial Group, an insurance company based in Binghamton, N.Y., wisely slips away around 11. I foolishly hang in there, sampling more local brews (the last being a New Glarus Spotted Cow ale, I believe). I stagger out at 12:30, disappointing those who stay the additional two hours to close the place down.

After what seems like only a few hours, the phone in my hotel rings: "You're late for the pregame brunch," Madsen barks directly into my brain. "Bucky Badger and the cheerleaders are coming any second. Get over here!" Okay, okay, okay, I say, scrambling out of bed. Well, turns out Bucky and the cheerleaders never show (a Madsen ruse?). But there are sausages. And eggs. And Bloody Marys!

An hour later we're off to the game. It's a lovely, unusually balmy day for November. As we walk over to the stadium, drinks in hand, we stop for a minute to pick up some brats. A little raw onion, some mustard, and we're good to go. And then, suddenly, it all catches up to me. The breakfast, the brat, the Bloody Mary, never mind the tequila shooters, the Plaza burger, and the Spotted Cow. (Whew! Deep breaths! Deep breaths!) But I'm able to compose myself and head into the stadium for the game. In the end, the Illini win 37-20, as Wisconsin falls to 1-5 in the conference. A disastrous season for coach Barry Alvarez and the football team. And yet a successful, even blissful reunion for the gang from ASAP.

As I numbly cab out to the airport, I'm still thinking about this place and why it produces all these money managers. Yes, it's the continuity of Graner to Hawk to Fedenia. Yes, the students run real money and work themselves silly doing so. Yes, there is the dedicated alumni network. But there's something more, I think. Something Midwestern, quite frankly. Almost equidistant between the razzle-dazzle of Silicon Valley's Sand Hill Road and the power lunches at Manhattan's Four Seasons, folks in Madison just don't seem to get quite as high or quite as low as their coastal brethren. Which is probably pretty desirable for a money manager. While some may look down their noses at football and beer, I suggest that those pursuits beat the hell out of playing the Bay Area real estate market or vying to get your kids into the most elite nursery school in New York. What do those things have to do with the money-management business, anyway? Absolutely nothing.

REPORTER ASSOCIATE Julia Boorstin

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