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Paradigm
Capital Management Profile
THE
DEFINED CONTRIBUTION
market is one of momentum where trends appear to take on
a life of their own and can at times become over
emphasized. The current trend is toward asset
allocation funds which include target date funds with
some experts estimate are capturing over 50% of all new
money. While target date funds are useful and valuable
for some plans, especially those sold direct or ones
that do not have an experienced advisor, these
investments can be over used and advisors that rely on
them are in danger of being squeezed out. Finding gems
like Paradigm Capital Management are important ways for
experienced retirement advisors to show their true
value.
Paradigm, based in NY, has been managing money since 1994
primarily in the DB market focused on the small cap
value sector. Their history goes back to 1972 as a sell
side research boutique run by their founder Candace
King Weir. With 23 employees and almost $2
billion under management, their small cap value fund (PVFAX)
has enjoyed Five Star status and still has a lot of
capacity. They have two other funds with more than
three years history, offering small cap core and mid cap
blend in addition to small-cap value. Paradigm is
looking to add their funds to record keeping platforms
but is currently available on most retirement clearing
houses like Schwab, Matrix, TD Ameritrade and Fidelity’s
IWS group. Today, advisors have a tremendous amount of
influence on record keepers to quickly add unique funds
like Paradigm if their current provider does not
currently make them available.
Many institutional money managers use a core and satellite
strategy buying beta cheaply coupled with larger money
managers but adding in specialized managers like
Paradigm to generate alpha. Experienced advisors are
shying away from just slapping in target date funds and
have gravitated to glide paths where they can add value
like institutional managers have done. Paradigm Capital
Management is a firm that advisors can use to add unique
value to their plans and separate themselves from less
experienced or involved advisors that are just using
what is big and popular. In today’s difficult
environment, the larger, well known brands are coming
under scrutiny opening up opportunities for
specialized, good performing managers like Paradigm.
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