By Dan SondhelmAre you familiar with the Croft Value Fund? Maybe you read the recent article in Barrons or watched co-managers Kent and Russel Croft’s appearances on CNBC.
Just two years ago this fund was an overlooked gem that few investors besides friends, family and firm clients had heard of. With just $15 million in AUM, the fund had excellent performance, 5 stars by Morningstar, a 12 year history, and the fund’s advisor, Croft Leominster Inc., in Baltimore, MD, also managed $450 million in total AUM.
Today the fund is near $150 million in AUM and generating positive flows. Shares outstanding are at record highs. Firmwide assets have grown to over $600 million.
Phillip Vong, head of sales and marketing for Croft Leominster Inc, who is instrumental in managing the growth of the business, was nice enough to take a few minutes to share his strategy to get and stay discovered.
Dan Sondhelm: Phillip, you had an excellent fund that was small. Why did you commit to growing the fund after all these years?
Phillip: We launched the fund to be able to handle smaller accounts, as we were primarily a separate account shop. It took a decade to realize outside investors would actually be interested in investing in our fund and many, many months to develop a growth strategy we would be comfortable with.
Dan: So what did you finally decide?
Dan: So what did you finally decide?
Phillip: We work aggressively to tell our story through the news media. We talk with reporters on the phone and in-person. Often, reporters write about us, our investment process and thoughts on the market. Then we reuse the articles in our other sales and marketing efforts. For example, we display them on our Website, bring reprints to advisor conferences, and email links and reprints to our lists of advisors. This effort stimulated enough demand for some of the platforms to more quickly get us on the platforms.
Dan: What else did you do?
Phillip: We are more proactive with the advisors on the platforms. We are going to their conferences to meet them face-to-face. We are also sending them fund updates by email when we have something of interest to say such as when we are profiled in the media. We offer conference calls so advisors can interact with us on a regular basis. We also significantly upgraded our Website to provide more timely information that archives our press coverage, conference calls, and other information.
Dan: This process clearly has worked. Now that you have significantly more customers than you did just two years ago, how do you stay in front of them? What is your process?
Phillip: We look at the list of advisors who own our fund from the platforms like Schwab and TD Ameritrade. Then we look them up on the RIA Database to determined their characteristics such as AUM, locations, etc. When we spot a new advisor, we call them and try to find the specific advisor that purchased our fund. This is often difficult to do. But if we are able, we invite that person to talk with one of our portfolio managers, ask if they need anything from us, provide more details about our story, find out how they heard about us, and send them a thank you letter with some marketing materials.
Dan: How do you keep track?
Phillip: We record everything into a database. My database tells me everything I want to know like who our customers are, what their current status is, and how much they have with us. It also shows the detailed communications history.
Dan: Do you stay in contact with these advisors beyond the intial purchase?
Phillip: We are more proactive with the advisors on the platforms. We are going to their conferences to meet them face-to-face. We are also sending them fund updates by email when we have something of interest to say such as when we are profiled in the media. We offer conference calls so advisors can interact with us on a regular basis. We also significantly upgraded our Website to provide more timely information that archives our press coverage, conference calls, and other information.
Dan: This process clearly has worked. Now that you have significantly more customers than you did just two years ago, how do you stay in front of them? What is your process?
Phillip: We look at the list of advisors who own our fund from the platforms like Schwab and TD Ameritrade. Then we look them up on the RIA Database to determined their characteristics such as AUM, locations, etc. When we spot a new advisor, we call them and try to find the specific advisor that purchased our fund. This is often difficult to do. But if we are able, we invite that person to talk with one of our portfolio managers, ask if they need anything from us, provide more details about our story, find out how they heard about us, and send them a thank you letter with some marketing materials.
Dan: How do you keep track?
Phillip: We record everything into a database. My database tells me everything I want to know like who our customers are, what their current status is, and how much they have with us. It also shows the detailed communications history.
Dan: Do you stay in contact with these advisors beyond the intial purchase?
Phillip: Yes. I try to find them in our email system and see if they were on our recent emailings. If they exist, I move them to my “Croft Advisors” list so I can keep track of the open rates and responses from our current advisors. If they are not on any list, I add them to the “Croft Advisors” list on the email system so they are poised for future email contacts. Of course, I also record all this in my database.
Dan: Anything else?
Phillip: When our portfolio managers travel, I look up advisors in the RIA Database to see who they can visit in the local area. Our typical advisor has more than $500 million in AUM so we try to contact others of similar size.
Dan: Thank you very much for sharing your expertise.
Dan: Anything else?
Phillip: When our portfolio managers travel, I look up advisors in the RIA Database to see who they can visit in the local area. Our typical advisor has more than $500 million in AUM so we try to contact others of similar size.
Dan: Thank you very much for sharing your expertise.
Disclosure: Croft Funds is a client of SunStar Strategic.
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