Information on the Target

Foundry Partners LLC, set to launch in February 2013, will be headquartered in Minneapolis, MN, with an additional location in Cleveland, OH. The firm is formed by a team of seasoned professionals, including Tim Ford, Seamus Murphy, and Amy Denn, who will hold majority ownership. Foundry will acquire specific assets from Fifth Third Asset Management, Inc. (FTAM) and is anticipated to begin its operations with a robust portfolio valued at over $2 billion in advisory assets.

Foundry will focus on managing growth and value equity strategies primarily for institutional clients, along with sub-advised and modeled portfolios. As part of its operations, Foundry intends to maintain an investment relationship with Fifth Third Bank, ensuring a seamless transition of the bank’s accounts subject to client consent and other conditions.

Industry Overview in the Target's Specific Country

The investment management industry in the United States is vast and continues to evolve, characterized by a growing demand for diverse investment strategies and asset classes. In recent years, the sector has witnessed a significant rise in institutional investors seeking advanced asset management solutions, pushing firms to innovate and adapt to changing market dynamics.

Moreover, the trend towards employee ownership in asset management firms is gaining traction. By creating a majority employee-owned structure, companies like Foundry are positioned to enhance their operational independence and align interests with clients. This model is increasingly appealing, particularly to seasoned professionals who value autonomy and a greater stake in their success.

Additionally, the rise of boutique firms reflects a broader industry shift, where specialized firms can provide tailored investment solutions and foster closer client relationships compared to larger, more traditional firms. This shift has facilitated the entry of new players in the marketplace, fostering healthy competition and innovation.

As the demand for personalized investment strategies continues to grow, firms that can combine robust experience with a client-centric approach are likely to succeed in this competitive landscape.

The Rationale Behind the Deal

The formation of Foundry Partners LLC represents a strategic alignment of expertise and resources designed to capitalize on opportunities within the asset management industry. By obtaining assets from FTAM, Foundry can leverage its existing client relationships while introducing a refreshed, employee-owned approach to asset management.

This acquisition allows the founding principals to create an agile and independent investment firm, enhancing service delivery to clients while fostering a strong sense of ownership and accountability among its leaders and employees.

Information about the Investor

Rosemont Investment Partners, LLC is a private equity firm that specializes in investments within the asset management sector. Established in May 2000, Rosemont is dedicated to providing capital for management buyouts, recapitalizations, and select startups in this industry. The firm emphasizes long-term partnerships and actively works alongside management teams to drive growth.

Rosemont has developed a reputation for fostering relationships built on trust and professionalism, which enhances its ability to support firms like Foundry in achieving their strategic goals. With Foundry being its first investment from the Rosemont Partners III, L.P., the firm aims to build a collaborative relationship to maximize client satisfaction and business growth.

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From an investment perspective, the establishment of Foundry Partners LLC appears to be a promising endeavor. Given the experience and industry knowledge of its founding principals, coupled with the backing of Rosemont Investment Partners, the firm is well-positioned to navigate the complexities of the current asset management landscape.

The decision to implement a majority employee-owned structure is a strategic advantage that may lead to enhanced client trust and loyalty, as employees with a vested interest in the firm’s success are likely to be more committed to delivering top-notch service.

Additionally, the transition from FTAM underlines a continuity in service provision while incorporating a fresh vision for growth. This blend of stability and innovation is critical for attracting and retaining clients in an increasingly competitive environment.

In conclusion, if managed well, Foundry Partners has the potential to emerge as a leading player in the asset management space, balancing client-centric strategies with sustainable growth objectives. Therefore, this investment should be seen as a favorable opportunity for all stakeholders involved.

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