New fund lets clients invest in Chattanooga-area real estate and investment deals

New fund lets clients invest in Chattanooga-area real estate and investment deals

October 18th, 2012 by Ellis Smith in Business Around the Region

John DeMoss is president of DeMoss Capital

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Tom Francescon of DeMoss Capital

The stock market can be a roller coaster, and savings accounts often lose value to inflation.

To counter the cyclical trends that propel the value of investments up to the heavens before sending them into a tailspin, John DeMoss, founder of Chattanooga-based DeMoss Capital, has a new solution.

Invest locally.

A $6 million fund launched with new adviser Tom Francescon will offer clients the chance to buy into Chattanooga-area real estate and investment deals previously only open to the very rich.

"If you can't get outside of public markets, it's difficult to get truly diversified," DeMoss said. "There are pieces of real estate here that are available and businesses that are very profitable."

The DeMoss Alternative Opportunities Fund will split 50-50 between private regional investments and hedged equity, DeMoss said, and already has made several moves since launching in April 2012.

Already, the group has bought some local property with reliable tenants and invested in a medical device company. The idea is that stable, local investments will perform well even during a national downturn, safeguarding portfolios for retirements and estate planning.

"A prospectus tells you about a company, but it doesn't tell you about the market," he said. "Here in Chattanooga, we know more about the local conditions."

Though similar to the $3.2 million Chattanooga Renaissance Fund, Francescon says the company will focus on mature companies and safe investments, rather than the early-stage investments favored by the Renaissance Fund.

"We're looking for noncorrelated assets, so when one investment class is going down, this one is going up," Francescon said.

The firm has grown revenue an average of 79 percent since 2010, he said, working from its downtown Main Street headquarters. DeMoss capital was founded five years ago, and now employs four advisers.