Institutional Consulting Services Group, which had about $60 billion under management. He was linked to both the investment side and operations, with involvement in all aspects of support for those units.
Johnson is a relatively recent addition to the team, but it was his longstanding friendship with Maitland that helped lure him to Advent Capital. “Tracy actually introduced me to my wife,” he notes. Johnson says many of his initial projects were focused on preparing the firm for future growth, such as the addition of a new database to manage client and prospective client contacts, a rebranding of the firm’s marketing materials, and the hiring of more people for the marketing and investor relations staffs.
Assembling a team whose members know each other well and trust one another is an important foundation for any successful business. Another person with whom Maitland’s had a longstanding relationship is Odell Lambroza, who heads the firm’s hedged strategies. He worked with Maitland for nine years when they were at Merrill Lynch.
Yet another Merrill contact who landed at Advent Capital is Dr. Douglas Melancon. Though he has an M.B.A. and a medical degree, the world of finance won out. Melancon joined the firm three years ago and manages all of its healthcare investments. “I finished my undergrad a year early, and I thought ‘medicine is a business,’ so I should probably know something about it,” he says.
Maitland says another important hire for the firm was Managing Director Hart Woodson, who joined in March 2006. Woodson is the author of Global Convertible Investing: The Gabelli Way (Wiley; $29.95), one of the few books you’ll find on the topic. He had managed the GAMCO Global Convertible Securities Fund (GAGCX) since its launch in 1994. With respect to growing the firm, Johnson says there are “always challenges.” As a result senior management spends a lot of time on recruiting and hiring.
Launching Closed-end Funds
The most recent expansion for Advent Capital was the launch of its first products for retail investors. The firm started out with the Advent/Claymore Convertible Securities and Income Fund (AVK) in 2003, and two years later offered the Advent/Claymore Enhanced Growth and Income Fund (LCM). Both are closed-end mutual funds that are publicly traded on the New York Stock Exchange. Closed-end funds, unlike open-end funds, issue a fixed number of shares. Investors can freely trade the shares on the stock exchange. The firm has a limited distribution network because of its size, so Advent Capital partnered with Claymore Securities to promote these funds–although Advent Capital is responsible for the daily management of both funds’ investments.
Moving into the closed-end fund business has benefited the firm in a number of ways. In general, it’s an attractive business for investment management firms because of the predictability of the revenue stream, Johnson says. Once the shares are issued, the firm maintains that pool of assets so there’s some consistency. An investment in a closed-end fund is like buying stock in an investment company. Individuals can buy and sell shares in the