Community Financial Institutions Fund

Our Investment Strategy

Community Financial Institutions (CFI) Fund is a hedge fund that invests primarily in the common equity of publicly listed U.S. community banks. Its portfolio managers believe this space will outperform the broader stock market over the long-run, primarily as a result of consolidation and the industry’s strong financial position.

Led by a former industry insider and top ranked sell-side analyst, the fund typically owns 15-20 core positions, placing a heavy emphasis on fundamental bottoms-up analysis and management quality.

Under this concentrated approach, the investment team has been able to consistently generate alpha through the achievement of superior company-specific knowledge.

The three characteristics that define our investments are:

  1. Better-than-peer Core Value growth (proprietary concept)
  2. Superior takeout potential
  3. Reduced market risk/correlation

In addition, the strategy adheres to an ethical investment policy designed to increase returns, reduce risk, and align our investment activities with the best interests of society.

For a copy of CFI Fund’s slide deck, Ethical Investing Policy or to set-up a conference call with portfolio management, please contact Paul LaFountain at 267-620-0639 or paul@aldeninvestmentgroup.com.

The CFI Fund Team

Frederick “Ted” C. Peters II

CEO
Mr. Peters serves as Chairman and CEO of Community Financial Institutions Fund. Previously, Mr. Peters served as Chairman and Chief Executive Officer of Bryn Mawr Bank Corporation (BMTC) and The Bryn Mawr Trust Company from January 2001 through December 2014. Under his leadership, the Bank increased from $420 million in banking assets to almost $3 billion. At the same time, the Wealth Services group at Bryn Mawr Trust grew from approximately $1.4 billion in assets under management and administration to over $7.6 billion. Full-service banking offices rose during this same time period from 5 to 29. Prior to joining Bryn Mawr Bank Corporation, Mr. Peters founded and served as the CEO of two community banks. National Bank of the Main Line was opened in March 1985 and was twice named the most profitable de novo bank in the Eastern United States. It was sold to Keystone Financial (now M&T) in 1992 for approximately 6x the price of an original investment. In 1995 he founded the highly successful First Main Line Bank which in 2001 was folded into National Penn Bank. During his banking career, he originated and closed nine acquisitions in the banking and wealth spaces. He is currently the lead director and Chairman of the Audit Committee of Paycom Software, Inc., an NYSE listed company located in Oklahoma City. Mr. Peters served on the Board of the Federal Reserve Bank of Philadelphia from 2009 through 2014. He chaired the Audit Committee of that Bank for two years and concurrently served on the Committee of Federal Reserve Audit Chairs in Washington, D.C. In addition, he has served on numerous nonprofit, educational, and trade association boards over his career. He is a cum laude graduate of The Haverford School and has a B.A. in Political Science from Amherst College.

Jason D. O’Donnell, Portfolio Manager

CIO
Mr. O’Donnell serves as Chief Investment Officer of Community Financial Institutions Fund. He previously served as Principal and Director of Research at Merion Capital Group since March 2012 where he was responsible for directing the company’s research strategy and covering publicly traded small and mid-cap banking institutions. Prior to Merion Capital Group, he was Director of Research and a Senior Research Analyst at Boenning & Scattergood, a brokerage and investment bank based in Conshohocken, Pennsylvania. At Boenning & Scattergood, his coverage focused on small and mid-cap banks located primarily in the Mid-Atlantic and New England regions. He previously conducted equity research at Financial Stocks, Inc., a hedge fund and private equity concern based in Cincinnati, Ohio, and at Ryan Beck & Co. Mr. O’Donnell was ranked #1 out of 113 analysts by StarMine for EPS Estimate Accuracy in the commercial banks category. Mr. O’Donnell has been quoted in numerous publications, including Barron’s, Business Week, CBS News, CNN Money, The Wall Street Journal, and USA Today. Furthermore, he has been credited with developing three major financial concepts specific to the fundamental analysis of banking institutions: the Failure Ratio, Success Ratio, and Core Value. He holds a BA from Franklin & Marshall College and an MBA from the Graduate School of Management at Rutgers University. In addition, he is an active member of Mensa International.

Lee Calfo

Director of Administration
Lee’s 20 years of financial services industry experience have focused on asset management, registered investment advisor (RIA) and broker/dealer (BD) formation and management, and capital markets. Starting in 2000, Lee began his research and asset management career as an analyst at several investment firms, and then a portfolio manager starting in 2007. Areas of investment focus included financial institutions, particularly publicly traded banking companies, income investing, long/short equity investments, and options strategies. Over the last 20 years Lee has also overseen investments in debt securities, securitized assets and investment partnerships that own real estate. Lee has been a FINRA registered securities principal since 2004 and was director of research at a Wall Street investment boutique firm from 2004 through 2008. In 2007 he launched his first long/short investment fund focused on financial services companies. Lee and his team have been responsible for the creation and management of an additional dozen limited partnership or fund strategies since. In 2010, he started his first registered investment advisor and to date has started three additional RIAs, started a broker/dealer and purchased a second, and taken over as the investment advisor for a 1940 Act mutual fund. Lee and his team plan to continue to leverage their existing entities as well as create new ones where necessary to manage current investment strategies as well as bring new ones to market. In founding and managing nearly a dozen financial services entities in his career including RIAs, limited partnerships, general partnerships, and BDs Lee had to learn and be responsible for both high-level tasks such as the formulation of sophisticated investment strategies as well as the mundane, including technology, accounting and financial matters related to these companies. Lee has also been responsible for the cultivation of clients for these businesses including among financial advisors, RIAs, fund-of-funds, banking companies, private companies, and individual investors.

Paul LaFountain

Research Analyst
Paul LaFountain completed a bachelor’s degree in psychology from the University of Phoenix. Shortly thereafter, he obtained a Master of Arts degree in teaching from the University of Vermont and was a middle school social studies and language arts teacher for seven years. In addition to being a teacher, Paul fulfilled a dream of becoming a high school basketball coach and is currently the head varsity girls basketball coach at BFA St. Albans in Vermont. While he was a teacher, Paul developed a passion for capital markets finance, with a particular focus on understanding the mechanics of both technical and fundamental analysis. After taking some applicable coursework in this area, Paul decided to make a career change and joined Alden Investment Group in 2021 to support the firm’s growing asset management business. Paul’s greatest strengths are his determination, attention to detail, hard work and eagerness to learn. He is currently studying to obtain his FINRA-administered securities licenses.

A Key Tenet

The U.S. bank stock market: where ethical investing is smart investing.

The Firm

The CFI Fund is offered on the Alden Capital Management platform. Headquartered in Wayne, PA, Alden Capital Management is a Registered Investment Advisor with more than $700 million in assets under management.

The firm, which is part of the Alden Investment Group family of companies, offers institutional investors and high net worth clients several actively managed strategies via hedge fund and separately managed account vehicles.

Our Principles

  • Focus on underfollowed companies
  • Maintain a concentrated portfolio
  • Behave and invest ethically
  • Minimize net long manipulation and market timing
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