From the September 2007 issue of Investment Advisor • Subscribe!

A Collective Effort

In 1996, Charles Haines recognized that his Birmingham, Alabama financial planning and investment management firm had to start giving its clients exposure to alternative investments, but was too small to gain access to the most attractive opportunities on its own. According to John Cox, the director of alternative investments at the firm, this realization prompted Haines to form a study group with several of his peers in the RIA industry who had the same objective, but who also knew they couldn't do it by themselves.

Today, Group 2020 comprises 11 RIAs across the country with aggregate assets under advisement of more than $8 billion. It has been the source of many of Charles D. Haines's leads in hedge funds, private equity, real estate, and other alternatives, says Cox. Member firms, he says, get more exposure to various alternative investments than they could as entities acting on their own because of their relatively small size. But although they may invest in the same products, they do not do so in joint ventures with one another, he says.

A big advantage of the collective effort, says Cox, comes in the critical area of due diligence. At Charles D. Haines, this burden falls primarily on Cox and Haines, but the endeavor gains robustness with the input of due diligence teams at the other member firms.

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