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Friday, May 27, 2016|
An East Coast Shop Launches a Subadvised Fund Family
An East Coast mutual fund shop is launching a second mutual fund family and they're looking for subadvisors.
"We'll continue to look for best-of-breed," Basten tells MFWire. "We're open to anything ... It really depends on the type of product that we're looking to bring to market."
"We would prefer employee-owned boutiques with audited track records ... and a well-defined process that's easily replicated," Basten adds.
The Yorktown Funds brand actually comes from Yorktown Management and Research, the investment advisor to the API Funds. Basten's father and grandfather launched the shop in 1985, and he says that the Yorktown Funds and API Funds brands will remain distinct.
The first two Yorktown Funds debuted on May 6. The first, the Yorktown Small Cap Fund, is subadvised by Vericimetry Advisors. The second, the Yorktown Mid Cap Fund, is subadvised by William Blair.
"This is the first time that we've ventured out into subadvised product," Basten says, noting that the API Funds are all managed inhouse.
The API Funds team aims to "broaden everything out" for their advisor allies and for investors.
"The API Funds are very difficult to pinpoint into a specific style box ... Advisors asked us if we have anything style-box-specific to small cap or mid cap," Basten says. "We don't want to compromise who we are or how we manage money, so we hired subadvisors."
And thus began the Yorktown Funds project.
"We started working on this last fall, at the end of October," Basten says. "We wanted to find money management firms that we were comfortable with, ... managers that performed well in a normal market or even a bear-market, with a well-defined process that's easily replicable, that weren't chasing trends or taking too much risk."
"We had the entire universe open to us," Basten adds. "We're an independent fund family. We can go out and seek best of breed for anything that we do."
Thought Yorktown Funds are subadvised and differently branded, they will be distributed the same way as the API Funds.
"Our existing sales team will be responsible for distribution of the funds," Basten says. " We've already heard back from a lot of our [platform partners] ... Within a month, we expect the two new products to be available almost anywhere."
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