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Friday, September 13, 2013

These Are Four Key Steps for Embracing Advisors

Reported by Tommy Fernandez

The path to embracing the advisor market started two years ago for AlpineWoods Capital [profile].

You can say it started with the hiring of Patrick Coyne as managing director, head of marketing for the firm. Coyne, who was previously director of marketing communications at Calamos Investments [profile], has been the driving force for this process.

"We made the decision two years ago to strategically think about how to offer these funds to a broader clientele. We made the decision to work more closely with advisors," Coyne recently told MFWire during an interview.

Alpine has been around since 1998. A family business, it was founded by Sam Lieber, who started at Evergreen Funds, which had been sold in 1994. His father, Steve Lieber was the founder of Evergreen Funds, and is a partner with Sam at AlpineWoods Capital Investors, LLC, and advisor to the Alpine Funds.

The firm has 15 open-ended funds and three closed end funds.

The funds they launched were no-load funds that were sold direct as well as through Fidelity and Schwab, etc., and over the years they launched a few closed end funds in 2007.

The Path to Embracing Advisors

Here is how Alpine transitioned from a direct-sold fund family to one that was advisor-distributed.

STEP 1: Expanded Share Offerings
First step, Alpine started offering a new share class, an A share class. This was started in December, 2011. It now offer A shares on 13 Alpine Funds.

Meanwhile, the firm's I-shares are now called Institutional Class with an investment minimum of $1 million and available on many fee based platforms.

STEP 2: Bolstered Staff

When Coyne joined the firm two years ago as head of marketing, he brought in a head of marketing communications and a director of creative and interactive services. He also hired four new external wholesalers and one internal dedicated to working with advisors across the country.

One of the big questions was: how do we leverage our success? We do a lot of business with Schwab, Fidelity, UBS, Morgan Stanley, Merrill Lynch and the independents. How do we leverage them. Our real focus with our sales team has primarily been the wires and secondarily the regionals and independents.

Further, he hired three new marketing executives, in part to help with the launch of a new website last July. The firm also hired three additional members to the real estate team and one senior credit analyst for the fixed income team.

One of our big efforts was our marketing effort: How do we develop marketing materials that advisors could use with their clients. How do we introduce the firm to a broader universe and partner more closely with our distribution channels? Can we capture more information on who is using Alpine funds and the profile of our new clientele?

They are now in the process of hiring a national accounts manager.

STEP 3: Rationalize Product Line and Introduce New Funds

Alpine launched a new fund at the end of May, but is not yet actively marketing it, the Alpine High Yield Managed Duration Municipal Fund.

"We have been bringing actively managed funds to market that are compliments to broader asset allocation strategies," he said. "This is not like your traditional muni fund. It is a high yield muni with a focus on income with a duration range of 3 to 7 years."

Coyne had this to say about the product rationalization as well as product development.

We are also rationalizing the product line. We are always looking at our product needs, are we meeting the needs of investors and potential shareholders going forward?

We are researching new products. There may additional products that will be geared to our capabilities in the future. When we think about product development, it is much more about where this product is going be different, what need is it going to meet. How do we meet that need consistently. Where do we see the upcoming themes or trends of the year where we can provide alpha.

STEP 4: Embraced the Idea of "Capability"

Coyne and his colleagues have devoted a lot of time to re-categorizing their funds according to a concept they've dubbed: "Capability Plus" or "Capability +."

The full motto for the initiative is "Aligning Capability with Need"

Our clients are very sophisticated. We try to be unique and different, not be like your traditional or index funds. We devote a lot of attention to how we categorize our funds.

We view our funds as a compliment to a diversified portfolio and tilted to meet specific investor needs income, inflation participation, portfolio diversification, aggressive growth, core and tax aware.

Alpine divides its funds up into four main capability groups.

1. Income
2. Income with Growth
3. Real Estate
4. Thematic

Coyne describes the utility of these groups in this way:

We have to focus on the needs of clients, what these clients are looking to address when they add or make a changes to their portfolio.

We feel clients have multiple needs. Needs such as inflation participation, tax awareness, aggressive growth, portfolio diversification, investment income and core/foundation needs.

We have taken all of our funds and organized them according to these capabilities and needs.

We have also developed the Fund Family Snapshot function [http://alpinefunds.com/default.asp?P=856340&S=856341] that allows investors to select funds via their capabilities and portfolio needs.

For example, you look at the Global Infrastructure Fund and you'd see that we defined it as a thematic fund, and that it meets three main investors needs: seeking inflation participation; investment income as well as portfolio diversification.

Planning for the Rest of the Year
Coyne said that "we are looking at our strategic plan as we speak, making sure we know which direction we are going."

That is part of our strategic plan, that strategic plan entails from a sales perspective: are we in the right channels, do we want to introduce new channels. Are we marketing to clients in the right way? Is there any venue that we want to exploit more, such as digital and more targeted marketing?

From the investment side, are our products competitive. How do we make them better? Any new investment trends?

All of these things are under review, Coyne said.

"We're happy where we are, but we don't feel that we have peaked in any way. We are not going to rest on our laurels," he said.  

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