Stephen and Sam Lieber seek out firms that create products to fill important needs. By Elizabeth Leary, Contributing Editor July 2, 2008 Innovation is always in high demand, says Stephen Lieber, who along with son Samuel co-manages Alpine Dynamic Innovators (symbol ADINX), a top small-company growth fund over the past year. So, says the elder Lieber, the pair invest in companies that create new products for which "there's a great need."A perfect example is Sequenom (SQNM). In early June, the genetics-analysis company announced a 100% success rate for tests of a product to detect Down syndrome in fetuses. Another is Polycom (PLCM), which produces teleconferencing gear that throws high-definition, life-size images on a screen. "You almost think the people are in the same room you're in," says Lieber, who has been a money manager for 58 years. He figures that companies trying to hold down rising travel costs will look to Polycom. Investment ideas come primarily from Alpine's 11 analysts, each of whom possesses some industry-specific background or interest. Although the fund leans toward small companies, the Liebers will consider companies of any size. One holding: agriculture giant Monsanto (MON), with a market value of $74 billion. Dynamic Innovators is only two years old, but the $43-million fund hasn't wasted any time in racing ahead of its peers. It has gained 16% annualized from its inception in July 2006, trouncing the small-company Russell 2000 index by an average of 12 percentage points per year.