A 33-Year-Old Boutique Hunts For Liftouts and Fund Mergers
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Thursday, November 1, 2018

A 33-Year-Old Boutique Hunts For Liftouts and Fund Mergers

A boutique fund firm's chief and his team are on the hunt for acquisitions, especially liftouts and fund mergers.

Dennis Patrick Clark
Shelton Capital Management
Managing Director
Dennis Clark, managing director of Shelton Capital Management [profile], confirms that M&A is an essential part of Shelton CEO Steve Rogers' growth strategy. The 33-year-old, Denver-based mutual fund firm has about $2 billion in AUM, 14 mutual funds, and a team of about 35 people between Denver, Greenwich, and San Francisco (where Clark is based).

On the one hand, Clark tells MFWire, the Shelton team is hunting to liftout PM teams, specifically teams offering strategies where Shelton currently doesn't. On the other hand, they're also looking to find funds running similar strategies to Shelton's, the better for fund mergers.

"Those are hard to find, but they make a lot of economic sense," Clark says.

"We're looking to grow obviously by organic growth, but ... we're not going to hit our growth targets without implementing our acquisitions strategy," Clark adds.

Shelton offers both active and passive strategies, and it offers both mutual funds and SMAs. The firm has a broad spectrum of strategies and looks for ones that are "time-tested." The idea, he says, is to use strategies that the Shelton team would be proud to offer to family members or 401(k) participants (a growing Shelton business line, alongside Shelton's independent advisor and direct high net worth channels).

"We have a certain investment philosophy," Clark says. "We do not swing for fences."

Clark sees the worm turning away from passive management, despite the recent flows woes on the active side.

"The mutual fund business is not dead. It's still the dominant structure in the 401(k) world and among professional investors ... Active management will have its day again, particularly in the fixed income world," Clark says. "It's a good time for small, quality mutual fund companies to join up!"

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