InvesTrust and Asset Services Co. will launch on April 1 an asset management and consulting program to target religious organizations with $2-20 million in assets under management. InvesTrust manages the program and Asset Services Co. is advising on it; both are based in Oklahoma City and are owned by ASC Holding. The service is being launched with five traditional managers that clients will access through commingled trusts, said Gordon Haave, director of investment consulting, adding that more managers will be added as assets grow. He is also investigating how to construct a hedge fund program that he hopes will be launched later this year. Given the huge number of small religious organizations, he thinks the program will have no trouble bringing in $300-500 million in assets within two to three years.

Most of Asset Services Co.'s consulting clients are religious foundations with more than $50 million in assets. But Haave, who joined in February last year from Devon Energy Corp., where he managed short-term fixed-income portfolios, realized that foundations with $2-20 million in assets were greatly underserved and were paying "outrageous" fees to brokers. "It really just burned me to see the way they were being mis-served by brokers calling themselves consultants," he said.

InvesTrust's program charges less than 1% of client assets for all services. The managers are Todd Investment Advisors for large-cap relative value, Quest Investment Management for large-cap growth, Luther King Capital Management for small-cap core, SIT Investment Associates for fixed income and Lazard Asset Management for international and emerging market equity. Religious foundations tend to be conservative, so these managers were chosen for their low risk profiles, as well as impressive track records and stable teams and investment processes, Haave explained. They will exclude stocks exposed to tobacco, alcohol, gambling or major military contracts.

Haave has yet to decide whether InvesTrust will construct its own fund of hedge funds or go through fund of fund managers. The strategy will be low risk and low fee, he added.