Kinetics Asset Management
has taken a gut punch from the bear, but the firm isn't getting antsy. In fact, the White Plains, New York-based firm has started shopping!
"Definitely, there are other fund companies out there that are looking for other opportunities," said Brooke Connell
, senior vice president of business development. "We're actively looking. We're talking to two fund companies right now that would be more of the value-type managers."
So, what is Kinetics looking for in a value shop?
"We're looking for companies where we don't have to pay top dollar for them," said Connell. "There are a lot of small companies out there that have great products but may not have the distribution."
Connell added that a likely firm "will have a few hundred million under management and be more of a pure mutual fund organization." Furthermore, while many value shoppers are trying to pick up the investment know-how, Kinetics is mainly keeping its eye on the product.
"We're looking for a company that has some very good products with some potential for growth," explained Connell. "If the portfolio managers would clearly like to stay, we would entertain that, but we have a very large portfolio and research staff and their backgrounds are value. We have the necessary staff in-house."
At the end of March of last year, Kinetics had more than $1.5 billion under management, a figure that had fallen to $576 million by the end of January: a drop of more than 60 percent and nearly a billion dollars, according to Financial Research Corporation. Such a fall might make watchers guess that Kinetics is having trouble keeping on all its staff, much less consider an acquisition.
"We are a very lean organization here, so at an organization level, it hasn't really affected us," countered Connell. "We've cut back a lot on advertising. We don't see a lot of sense advertising in the market the way it is."
Can Kinetics fork up the dough when it gets to the register?
"We think we're in a pretty good position," said Connell. "The market's been pretty bad but we've been able to save some capital and are looking for opportunities."
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