Centennial poised to grow - Memphis Business Journal:

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Becoming independent is the third phase in a strategy started threee years ago when Joe Wade was tapped fromwithin Memphis-based to head up the new alternative fundzs venture. In addition to the Canalesx and Wilsons, the other one-third owner is Marvin Bruce, the formef president, CEO and chairman of , the larges t marketer of automotivereplacement tires. The partnerd felt the timing was right topurchase CSG'as remaining 21% interest in "We felt like this business got its own identit y and it would be advantageous to be a stand-alone business without any other ties," Wade says. "They're (CSG) still good friends of And neighbors.
Both are locatedf on the same floor at theCrescentr Center. Centennial now has more than $420 million in threr fund of funds it managea for some 70 clients acrossthe U.S., Wade The minimum investment per fund is $1 The firm has now grown to a stafc of nine, which gives Centennial the people it needxs to grow. "We've staffed ahead of Wade says. "We could probably doublwe in size." Centennial's three funds includwe the HeritageEquity Fund, a long and short equituy fund started in 2003 with $55 It now has about $150 milliobn in assets and includes 16 different The multi-strategy, fixed income Absolute Return Fund was startedc in January 2004 with $25 million and now has abourt $200 million and is comprised of 23 separatwe funds.
The newest, the Global Macrok Fund, was started in November 2004 with $15 million and now has $70 It is comprised of 14 differen funds. Of the three, Wade says it is the most but it also had returns ofnearlty 15% this year. While each fund has differenftrisk levels, the key is managingv the fund managers to control risk. "We're in the stay-ricy business, not the get-rich business," is the generao attitude that hangs over Wade when decidingyon Centennial's investment strategy. Wade spenf four years as a consultant at CSG after the company purchasedhis Birmingham-based hedge fund Alternative Investment Strategy, in 1999.
At CSG his main role was to buildf alternative investment consulting practices for families andinstitutionao investors. "Our success or failure is easily he says. "Consulting is advisory. You have the responsibility ofmoneg management, but not the authority." Martu Kelman, CEO of the investment firm , says he generallyu stays away from hedge funds. While some hedge funds can produces double-digit returns, others produce modest or negativew returns. "Making a lot of money throug h hedge fundsreally doesn't suit our structure," he says. Kelman-Lazarov'as strategy is about hitting singlesand doubles, not just home which can also lead to a lot of he says.
The typically high hedgre fund feesof 1%-2% plus up to 20% of profits, and the lack of governmentt regulation also worry Kelman. But for the hedge funds in general and Centennial in particular have beengood investments, says Spence Wilson, presidenr of . Over the past last decade, the Wilsonsd have increased the percentage of alternative investments in their portfolio as they got comfortablew with it and saw less opportunities inothedr funds, Wilson says. And while he recognizes that hedger funds can be the fund of funds approachj helps minimizethat risk. "The fundsz concept gives you great exposure to great hedged fund managers with substantially reduced he says.
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