Brentwood mutual fund group raises $3M

With asset base swelling quickly, growth capital to fuel sales expansion

A fast-growing mutual fund family based in Brentwood has raised $3 million in growth capital through a private placement and will put the money to work building a bigger salesforce.

Compass EMP has more than doubled its asset base to about $720 million since late 2009, almost half of which is housed in three funds offering investors the chance to diversify in up to 15 alternative asset classes via baskets of exchange-traded funds. That broad-based, lower-risk approach — which puts funds to work around the world in real estate, commodities, hedges and other asset classes — has gained in popularity in recent years, particularly as the U.S. equity market has become more volatile.

But Compass President Rob Walker said the timing of his team's raise isn't a case of capitalizing on the hotness of a number of investment classes. Compass markets its funds to financial advisors as core holdings that bring a level of diversification their retail investors have historically struggled to access. The company now works with about 1,000 advisors around the country, up from about 200 a year ago.

"We want to be opportunistic, but this is not so much about striking while they iron is hot," Walker said. "We're doing what we've been doing since 1996."

Walker plans to hire eight to 10 people for Compass' corporate office in the coming quarters and grow his team independent sales team from 18 to about 25.