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Rating:RS Investments Keeps its Eye Out for More Deals Not Rated 4.0 Email Routing List Email & Route  Print Print
Wednesday, September 8, 2010

RS Investments Keeps its Eye Out for More Deals

Reported by Armie Margaret Lee

RS Investments [see profile] yesterday wrapped up the first ever acquisition in its 24-year history and according to its top executive, the firm is open to doing more deals.

"We would consider adoptions, liftouts and acquisitions," said RS Investments CEO Terry Otton in an interview with The MFWire.com. "We are continually in discussions."

RS Investments, a subsidiary of Guardian Investor Services, yesterday completed its purchase of the business assets of Oak Value Capital Management. Otton declined to discuss the financial terms of the transaction.

Grail Partners and Warren International advised RS on the deal.

The transaction brought it the $86 million Oak Value Fund, which RS reorganized into the RS Capital Appreciation Fund (RCAPX). RS now offers a total of 23 mutual funds.

RS Investments also picked up $88 million of separate account assets from Oak Value Capital.

A total of seven people from Chapel Hill, North Carolina-based Oak Value Capital are now with RS Investments, including principals and portfolio managers Larry Coats, David Carr and Christy Phillips who joined RS as partners.

"We wanted to fill the gaps in our product line," Otton said. One of the gaps the firm identified was the growth-at-a-reasonable-price strategy.

RS Investments started the search process nine to 12 months ago. "We do things very cautiously and thoughtfully," Otton said. "We spent a great deal of time getting to know our partners."

There were six firms that made RS' short list. Eventually, RS Investments decided to do a deal with Oak Value Capital.

"Culturally and philosophically, we saw eye to eye," Otton said.

As for other areas RS is looking at, Otton wrote in a follow-up e-mail: "We have identified other complementary capabilities that may make sense for RS and our clients down the road." He declined to provide specifics.

RS Investments has $16.1 billion of assets in its 23 mutual funds. 

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