For Clemente, resigning as the sub-advisor to the Citizen's fund just made sense, said Alfredo Viegas, managing director of Clemente. Viegas, a hedge fund manager and the former manager of the Lexington Emerging Market Fund signed on this past July to lead Clemente's entrance into the non-U.S. hedge fund business.

According to Viegas, Citizens followed inconsistent social policies and wanted to retain the fund's growth stock bias despite Clemente's desire to move into value stocks; the area of the market where Clemente saw the most opportunity.

Moreover, Clemente had determined that it no longer wanted to subadvise anyone else's mutual fund. "In this business, you cannot be a sub-advisor anymore. You have to own the product," Viegas said. Despite Clemente successfully managing the fund for seven years, Citizens received all of the kudos and the lion's share of the management fees for the fund's great performance, he added.

But the resignation was also part and parcel of a bigger, more tactical decision, said Viegas.

"Two years ago I started to set changes in motion," said Lilia Clemente, the firm's founder. "It's not enough to run just a mutual fund business. As a small fish, there is no way to compete. And closed-end funds are a different business now. We'll move forward, but we are changing the model."

"Clemente is poised to develop other, more flexible opportunities. Our hands are no longer tied and we want to exploit our own strength," Viegas said. The firm is ready to leverage what it has always believed is its core competency--global money management for non-U.S. clients. "To be successful you have to be a small niche player and be unrestrained," he added.

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