From the June 2010 issue of Investment Advisor • Subscribe!

When Contrarians Create

A sidebar to the feature, "The World Their Oyster."

For more than a decade after the firm was founded in 1985, Malcolm H. Gissen & Associates provided comprehensive financial planning and investment advisory services to its clients. But in the 1990s, those clients began to be less concerned with financial planning and more concerned with the firm managing their money.

Malcolm Gissen, the firm's founder, was quick to read the cues and to switch gears. In 2000, Gissen teamed up with Marshall Berol--with whom, he says, he shared similar investment theories and visions--and subsequently, Malcolm H. Gissen & Associates began to focus its efforts on the money management business instead.

"Both of us are deep value investors and we are both genuine contrarians," Gissen says of his relationship with Berol. "We're top-down and bottom-up investors and after Marshall became CIO in 2000, we had the opportunity to formalize our investment style."

This meant creating a brand-new mutual fund, since nothing else in the marketplace really suited either the duo's investment style or their approach to the money management business.

"We would look at a particular industry that we liked and see some large-cap companies in it, some mid-cap companies and some small-cap players, and we wanted to be able to invest in all of them," Berol says.

Going beyond the prescribed boundaries that limit most mutual funds, the Encompass Fund was set up to be able to go anywhere and invest in any kind of company, no matter its size or industry. The fund can stick with its investments through time because it has no limits, Gissen says, "so if we invested in a small-cap company that does well and then becomes a mid- or large-cap, we don't have to sell it, like other funds might have to do, because we weren't formed to do only small cap."

The flexibility this approach affords, Gissen says, is the best way to deliver the kinds of returns that long-term investors in the Encompass Fund are looking for.

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