Cincinnati-based Horter Investment Management launches Civitas Advisor Solutions – Cincinnati Business Courier – Cincinnati Business Courier

A Greater Cincinnati investment advisory firm with a different business model has launched a business to expand its reach.
Symmes Township-based Horter Investment Management has launched Civitas Advisor Solutions, a company that helps independent investment management firms manage their operations so they can focus on clients.
That comes on the heels of Horter’s addition in 2019 of Tactical Fund Advisors. It added to that family of mutual funds by introducing its sixth fund late last year.
Civitas expands on Horter’s longtime strategy of not only employing its own investment advisers but also providing investment management services and helping independent advisers bring in new clients. Horter, led by CEO Drew Horter, works with about 40 independent firms through that service.
Civitas helps small firms with compliance, marketing, administration, and other services, as well as investment management.
“We’re here to help them run their practice more efficiently,” Horter told me. “Civitas does a strategic business optimization plan designed specifically for them. We really become the adviser’s adviser.”
The service aims to save costs for advisers as it helps them operate more efficiently. Horter works with several outside service providers to handle compliance, marketing and other tasks.
“We think we can save any adviser 30% to 50% per year in costs,” Horter said.
Horter, who founded Horter Investment Management in 1982, brought in Jim Malgeri last year, Malgeri is president and COO of Civitas as well as COO of Horter and Tactical Fund Advisors. Malgeri is an industry veteran who had previously been with Commonwealth Financial Network.
“His whole role was to grow Horter and TFA,” Horter said. “We decided to set up Civitas as a consulting firm that complements everything else we do.”
Horter founded his namesake firm in 1991. It manages nearly $400 million in assets. That’s in addition to the services it provides to outside advisers.
As the firm launched Civitas, it was also expanding its mutual fund business. It added a sixth fund, the TFA AlphaGen Growth Fund, last year. That gives the firm six funds that uses tactical investment management to move in and out of stocks in a large way.
“After going through the early 2000s and the Great Recession of 2008, I had seen too many people get devastated by 50% losses,” Horter said. “I didn’t want to do that anymore. We decided to take some of our best tactical money managers and roll them up into a mutual fund.”
That enables more people to access Horter’s investment advice. Minimum investments are just $500.
The six funds differ primarily in the level of stocks or bonds they hold. The TFA Quantitative Fund is the most aggressive, allowing up to 100% of the fund’s assets to be invested in equities. The level gradually moves down to the TFA Tactical Income Fund, which can invest up to 30% in bonds, with the rest in equities.
The funds move assets in and out of stocks to avoid steep declines, Horter said. They’ve been raising cash since the beginning of the year, a wise move so far as the S&P 500 has fallen 12% since then.
“The biggest part of tactical investing is you won’t have a 50% decline if the market falls that much,” Horter said. “If the market is down 50%, the TFA funds could expect to be down much less than that.”
Horter now has $250 million in its six mutual funds. Drew Horter expects that to jump late this year after its initial three funds cross the three-year mark, qualifying them for a Morningstar rating and opening opportunities for institutional investors to put money in those funds.
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