Nothing builds street cred better than a deal done well.
And that is just what Neil Hennessy
, chairman and chief investment officer at Hennessy Advisors
, is banking on for the next year.
He believes that the industry will undergo a spate of consolidation over the next 12-to-18-months as smaller shops implode under the weight of growing regulatory burdens and distribution challenges.
Hennessy intends to take advantage of this trend to search for bargains that will help grow his firm.
One big advantage in his favor: the successful completion
of the $27 million purchase of FBR & Co.'s
$1.9 billion fund business. Many at the time had expressed doubt that the firm could pull it off, but Hennessy has demonstrated a singular approach towards growth
that has helped garner respect.
Hennessy expressed the benefits of the recent success today to an MFWire
reporter in this way:
We're in our sweet spot. We have built a history of growth via well-executed deals, such as the FBR acquisition. People know that we can handle these deals well. Very few others in the middle market
have actually completed any deals. Few of the top firms need to do a deal of this size — an acquisition of $5 or even $10 billion would barely move the needle for them.
Hennessy said that he is open to looking at firms from $5 to $10 billion, even higher if the business particulars of the firm worked.
However, he is only interested in equity shops, be it global or domestic. He expects that fixed income will have difficulty due to the headwinds expected to hit the global debt markets. He also explained that he is not interested in either alts products or exchange-traded funds.
"We're not interested in acquisition for acquisition's sake," Hennessy said. "We are only interested in deals that make sense to us, and offer plenty of value to our shareholders."
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