What's the importance of a date? Kelmoore Investment Company had originally planned to launch its Liberty Fund on January 1 but ended up rushing for a pre-New Year release date. As the market continued to tank, the firm realized that it could lose money to tax-loss selling without a money market-like option; furthermore, Kelmoore had operated under the misimpression that it would be able to report 1-year performance at the beginning of 2002.

"We wanted to do it at the end of the year because a lot of people do tax-loss selling," explained Tammy Heiman, senior executive vice president of marketing and operations at the firm. "We don't have a money market, so we wanted people to have a place to put their money -- not that it works like a money market, but it's the closest thing we have."

Kelmoore raced to open the fund before the end of the year, and made it, but the firm paid the price.

"If we had started it on January 1st, we would have been one day shy and we would have had to wait another year for performance, which would have been a big bummer for us," said Heiman. "What even makes it harder, since we did have it in December, I had to Blue Sky the fund for four days of business just to have to renew again this month."

Kelmoore won the battle on one front by winning itself another year of performance, but Heiman explained that the firm's marketing materials weren't ready in time to generate serious flows into the nascent fund. Was it worth it?

"I think we got over $2 million in," said Heiman. "It's very difficult when you're a new fund company. It's worth it."

 

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