Strategic Partners

How to Sell, Buy, or Be Adopted

What happens if your firm is holding its own but little else? Assets may be flowing in and out of your complex at about the same level. Or you could be in net redemptions. You may be losing ground to your competition.

Is the time right to consider merging with another firm, partnering with a new relationship – or even exiting the business?

Fund Adoptions

Fund adoption may make sense if you prefer to give up the perceived headaches of the fund industry, but want to continue to manage assets and be part of a firm committed to growth.

For funds with identical objectives, if your track record is strong, the acquiring firm may replace the existing track record with the better one – and let the adopted manager continue to manage it.

If your assets are small, the acquiring firm may simply adopt you and pay the legal and operations fees. If you are larger, they could pay you for the assets. In either case, you can stay on as a sub-advisor under a contract, or become an employee.

In some cases, the adopted manager can become part of the team of the larger firm and manage more strategies and assets, be part of a sales and marketing process, and even earn equity in the acquiring firm.

Fund adoptions may be an opportunity of a lifetime for opportunistic firms who are looking to partner with funds with a track record to add to their product line, or add assets to an existing, perhaps underperforming product.

Sondhelm Partners can represent buyers and sellers and conduct a strategic search for the right relationship for potential merger, acquisition or adoption.

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