A Baltimore money-management firm said yesterday that it will make its first foray into the mutual fund business, as Croft-Leominster announced it will open income and value funds May 1.
The firm was founded in 1989 by L. Gordon Croft, a former director of Baltimore mutual fund titan T. Rowe Price Associates Inc., and is managed principally by Mr. Croft and his son Kent, a 32-year old former Salomon Inc. executive. "We think we do a good job for our clients," Kent Croft said. "We figure that if we do the same good job, we'll have a product that will work for our clients and work for us." Croft-Leominster manages about $300 million for high net worth individuals, pension funds and other sophisticated investors,Mr. Croft said. But its smallest limited partnerships required a minimum investment of $50,000, which sharply limited the base of investors the firm could serve.
Mr. Croft said the income fund will begin operations with a base of about $3 million to $4 million in assets that are to be transferred from some of the firm's other operations. The company is still lining up investors in the value fund, which the company said will invest in stocks with low ratios of price to earnings, book value and cash flow.
The small Redwood Street firm has had strong results since 1991 in its limited partnerships, which Mr. Croft said make investment decisions based on the same principles that will guide the mutual funds. A recent survey placed Croft-Leominster 21st out of 510 firms that have managed $100 million or more of stocks over the three years ending Dec. 31.