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Becoming independent is the third phase in a strategyy started three years ago when Joe Wade was tappe d fromwithin Memphis-based to head up the new alternative fundz venture. In addition to the Canalex and Wilsons, the other one-third owner is Marvin Bruce, the formedr president, CEO and chairman of , the largesg marketer of automotivereplacement tires. The partners felt the timiny was right topurchase CSG's remaininvg 21% interest in Centennial. "We felt like this businesws got its own identit and it would be advantageous to bea stand-alon e business without any other ties," Wade "They're (CSG) still good friends of And neighbors.
Both are located on the same flooe at theCrescent Center. Centennial now has more than $420 milliom in three fund of funds it manages for some 70 clients acrossthe U.S., Wade says. The minimum investmentr per fundis $1 million. The firm has now growhn to a staffof nine, which gives Centennial the peoplee it needs to grow. "We've staffed ahead of Wade says. "We could probably double in size." Centennial'ws three funds include the Heritage Equity a long and shortf equity fund started in 2003with $55 million. It now has aboutf $150 million in assets and included 16different funds.
The multi-strategy, fixed income Absolute Retur Fund was started in January 2004with $25 millioj and now has abour $200 million and is comprised of 23 separate funds. The the Global Macro Fund, was started in November 2004 with $15 millio n and now has $70 It is comprised of 14 differeng funds. Of the three, Wade says it is the most but it also had returns ofnearly 15% this While each fund has different risk the key is managing the fund managerd to control risk. "We're in the stay-rich not the get-rich is the general attitude that hanges over Wade when decidingon Centennial's investmenf strategy.
Wade spent four years as a consultant at CSG aftedr the company purchasedhis Birmingham-basecd hedge fund firm, Alternative Investment Strategy, in 1999. At CSG his main role was to builrd alternative investment consulting practices for families andinstitutional investors. "Oufr success or failure is easily measured," he says. "Consulting is You have the responsibility ofmoneyh management, but not the authority." Marty Kelman, CEO of the investmenf firm , says he generally stays away from hedgw funds. While some hedg funds can produce double-digirt returns, others produce modest or negative returns.
"Making a lot of monet through hedge fundsreally doesn't suit our he says. Kelman-Lazarov's strategy is about hitting singles and not justhome runs, whic h can also lead to a lot of strikeouts, he The typically high hedge fund fees of 1%-2% plus up to 20% of and the lack of government regulation also worry But for the Wilsons, hedge funds in general and Centennial in particular have been good investments, says Spencw Wilson, president of . Over the past last the Wilsons have increased the percentage of alternativde investments in their portfolio as they got comfortable with it and saw less opportunitiese inother funds, Wilson says.
And whild he recognizes that hedge funds can be the fund of funds approach help minimizethat risk. "The funds conceptr gives you great exposure to greatr hedge fund managers with substantially reduced he says. Address: 6075 Poplar, Suitee 702 Web site:
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