Transactional Advice

Sales and Divestitures

A variety of motives, objectives and circumstances can trigger the desire to explore the partial sale or complete divestiture of an investment management business . . .

• The founders are preparing for ownership transition. Significant equity has been granted, or sold at a discount, to the next generation. A compatible partner is sought who will respect the firm’s independence and help the founders achieve liquidity and an orderly transition.
• The firm has grown on the strength of its investment products and performance, not its marketing prowess. The shareholders see significant potential for further growth, but are not the ones to build the marketing and distribution needed to take the firm to the next level. They seek a strategic partner who can help them achieve their growth potential, while also allowing them to realize some current capital value.
• A bank insurer, trust organization has changed strategic direction. Its investment management affiliate is no longer a good fit. The reasons could include:
  • Moving away from a particular geography, client segment or product strategy
  • Merger with another financial institution with overlapping capabilities
  • Move to open architecture – the affiliate’s proprietary products are an awkward fit.

Cambridge is positioned to provide expert advice to assist owners in achieving these and other objectives in the search for a strategic partner. Most clients wish us to explore opportunities with a targeted range of prospects. Many engage us having already commenced a dialogue with one favored potential partner.

The value we bring to the process includes. . .

• An organized and competitive process that assures our client of the best available balance of valuation, transaction terms and strategic/cultural fit.
• Deep existing relationships with the CEOs or business heads of strategic and financial investors in the financial services industry around the world. Our exploration will be targeted – our dialogue strategic and at a high level in the organization.
• Confidential process – client and employee relationships are protected. Our clients stay in control of when and how to signal their intentions. This can be a particularly sensitive issue in targeted geographic markets or industry segments.
• Detailed understanding of the “hard” (e.g. valuation) and “soft” (e.g. post-transaction governance) issues that emerge in finding the right partner and fashioning a transaction.
• Cambridge’s principals are your key advisors – we stay fully involved throughout the entire process.
• Providing the bridge when negotiations get tough – we help insulate our clients from aspects of the process that could impair the future relationship with a new partner.