Denver-based Choice Investment Management is in the process of closing down its mutual fund business in order to focus on hedge funds.
Patrick Adams, founder and ceo, said the firm decided to shutter its mutual fund business because “we felt it didn’t fit the long-term growth plan for the company.”
The three funds that Adams said would be wound down by year-end have performed poorly this year, with the Choice Focus fund losing 0.9%, the Choice Market Neutral fund losing 7.1% and the Choice Long-Short fund up a mere 0.3%.
Adams, who founded the asset management firm in 1999, said he expects that some of the current investors in the mutual funds will move over to the two hedge funds he manages, a multi-strategy fund and a market neutral fund. He said these funds were doing well, but he declined to elaborate on their performance. He also said he aims to increase assets under management by targeting institutional investors. Traditionally, most of the firm’s clients have been high-net-worth individuals.
“We do have institutional assets and it will be an ongoing focus to gain more,” he said.
Adams added that his firm is “nimble” and “optimistic” in its investment approach, and he believes that the fund closings will help him and his team to “focus on our best ideas.”
The firm, which currently has below $50 million in assets under management, has no plans to layoff anyone as a result of the fund closings, nor does it plan to make any new hires.