Gerald Tsai Jr., the boy-wonder mutual fund manager of the 1960s who broke Wall S;reet sales records in the go-go years of "performance" money management, has purchased a significant stake in Avemco Corp. of Bethesda.

The local company, which is the country's largest insurer of private aircraft, revealed yesterday the Tsai's Associated Madison Companies Inc. of New York has bought about 5.3 percent of Avemco's common shares.

Tsai's future plans, however, remained a mystery. Analysts said Avemco could become the target of a takeover fight since Tsai's interest in the Bethesda firm is the second to be announced recently.

Avenco President William Condon said Tsai met last week with Arnold Johnson, Avemco's chairman, "and had indicated his interest in Avemco and the fact that Associated was acquiring Avemco shares.'

Condon added that Avemco currently knows "very little about Mr. Tsai's intentions" but expects they will be disclosed in a statement about such ownership, which Tsai said would be filed today with the Securities and Exchange Commission, Avemco said.

Tsai, the board chairman of Associated Madison, declined to talk to a reporter yesterday. His firm is a holding company for life insurance and financial services enterprises. As of Wednesday, according to Avemco, Tsai's firm owned 131,800 shares of Avemco stock.

The announcement yesterday of a substantial outside stock purchse in Avemco was the second in three weeks. On Aug. 16, an investment holding company in Canada, Unicorp Financial Corp., revealed to the SEC that it had acquired 142,800 shares of Avemco -- or 5.75 percent of the shares outstanding.

On the American Stock Exchange yesterday, Avemco closed at an all-time high of $9,125 a share, up 75 cents on an unusually active volume of 18,500 shares.

Higher premium rates and good weather across most of the country, which reduced air accident claims from serious accidents, helped push Avemco profits to record levels in the first half of 1979. Earnings were up 66 percent to $1.7 million (67 cents a share) from $1 million (41 cents) a year earlier. The company also is engaged in finance services and product marketing. Dividends were increased 13 percent earlier this year.

Tsai, born in Shanghai, came to the U.S. in 1947. He joined a Wall Street firm as junior analyst in 1951, at $50 a week, but a year later was hired away by a Boston firm, where he built a $340 million fund.

In February 1966, he made Wall Street history by attracting $285 million to the initial offering of his Manhattan mutual fund, and he became known on the Street as the first of the fast-moving money managers, a description he reportedly did not like.

When he resigned from the fund management company in 1973, the era of aggressive money management symbolized by Tsai came to an end. He then moved on to other business interests.