Conceived in the early days of the dot com bubble, Firsthand Funds has been buffeted by events ever since. Now the only Silicon Valley-headquartered firm is making another big change.

Kevin Landis

The latest twist is a change in advisors at the firm that will leave Kevin Landis as the funds' portfolio manager while lowering the advisory fees charged against the funds.

Trustees of the funds formalized the switch last week, appointing SiVest Group, based in Santa Clara, California, to replace Firsthand Capital Management as investment adviser and administrator of the four Firsthand funds. The move was revealed in an SEC filing.

Landis determined in mid-2009 that "due to recent market turmoil and legacy costs, FCM did not have a sustainable business model that could be maintained over the long term." He therefore decided to form SiVest Group, Inc., a new advisory entity with a lower cost structure. Landis also decided that he would cease his employment at FCM and will instead provide investment advisory services to clients at SiVest, according to the filing.

The change then, was adviser-driven, not trustee-driven. The filing stated the FCM told the trustees that it did not intend to renew its contracts as investment adviser and administrator. Of course, Landis is both the owner of SiVest and chairman of the funds' boards, so that may be a distinction without a difference.

Landis will continue to be portfolio manager of the Firsthand Technology Value, Firsthand Technology Leaders, Firsthand e-Commerce and Firsthand Alternative Energy funds.

On the portfolio management side, Landis will be joined by Han Lee, who was also moved from Firsthand Capital Management to SiVest Group. Lee will be co-portfolio manager of the Firsthand e-Commerce Fund.

According to the filing, the adviser change will result in a reduction in management fees of between 10 to 12 bps. A shareholder vote on the adviser change is slated for November.

Another change is the appointment of PNC Global Investment Servicing as the new transfer agent effect November 21. PNC will take over from Citi Fund Services.

Landis formed the fund family with Ken Kam in 1994 (the advisor was then known as Interactive Research Advisors, Inc.) after they successfully managed money for friends through an investment club. They later added their college roommate Steve Witt as head of marketing and Landis' high school friend Yaquob Billawala as chief financial officer. Kam left in 1998 and the advisor reorganized as FCM in 1999.

FCM expanded its roster of investment analysts. At the time of the Nasdaq peak in March 2000, the firm had nearly $8.4 billion of AUM.

The firm had $236 million in AUM as of the end of June, according to Lipper.  

Edited by: Sean Hanna, Editor in Chief


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