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M&N funds (and the company as a whole) have been run for years by a very large management team of partners. It's not a family boutique, like say Yachtman, and it's actually pretty big already considering that their core business historically has been running pension funds and individual accounts. They went into mutual funds at first to offer investment options for relatives of the partners and employees, and only in the last 8-10 years really went for it in marketing to the great unwashed public.
Bottom line, IMHO, judging from the history, the current structure of M&N is certainly sustainable. For that reason, I'm a little bit skeptical that this IPO move is going to be a good thing for regular investors.
While the M* snippet suggests that M&N has been sustaining nice profit margins, M* also objectively classifies the family funds as "below average" in expenses.
And the S-1 registration filing includes among the risks to potential investors in the IPO, that M&N "may be required to reduce fees with respect to both the separate accounts [it] manage[s] and the mutual funds [it] advise[s]."
Further, the S-1 points out that as "principal stockholder", William Manning will still have majority control over the company via is Class B Common stock. There is a clear statement that Class B Common stock does not confer economic rights, so this structure/ownership is explicitly designed for control to remain with Manning. Thus there are warnings to prospective investors that this creates a conflict of interest between William Manning's and their own - i.e. the stockholders are just along for the ride, little is changing.
What is changing, and what M* picked up, is that it leaves M&N more stable upon Manning's ultimate demise. The current structure may not be as sustainable as you think:
"Prior to the reorganization transactions and this offering, we had a mandatory redemption obligation upon the death of William Manning to pay a formula-derived amount to his estate. Our liability related to this mandatory redemption obligation was calculated each fiscal quarter, and the change in the liability was reflected as a non-cash interest expense. Such mandatory obligation will terminate immediately prior to the consummation of this offering and we will no longer reflect non-cash interest expense or the liability related to such obligation."
Comments
Bottom line, IMHO, judging from the history, the current structure of M&N is certainly sustainable. For that reason, I'm a little bit skeptical that this IPO move is going to be a good thing for regular investors.
And the S-1 registration filing includes among the risks to potential investors in the IPO, that M&N "may be required to reduce fees with respect to both the separate accounts [it] manage[s] and the mutual funds [it] advise[s]."
Further, the S-1 points out that as "principal stockholder", William Manning will still have majority control over the company via is Class B Common stock. There is a clear statement that Class B Common stock does not confer economic rights, so this structure/ownership is explicitly designed for control to remain with Manning. Thus there are warnings to prospective investors that this creates a conflict of interest between William Manning's and their own - i.e. the stockholders are just along for the ride, little is changing.
What is changing, and what M* picked up, is that it leaves M&N more stable upon Manning's ultimate demise. The current structure may not be as sustainable as you think:
AJ