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Thursday, December 12, 2013

What's the Next Chapter For RidgeWorth? Parikh and Stueve Offer Hints

Reported by Neil Anderson, Managing Editor

With private equity backing lined up, the soon-to-be independent team at RidgeWorth [profile] has big growth plans.

Yesterday the $50.6-billion, Atlanta, Georgia-based mutual fund shop unveiled a deal, worth up to $265 million and slated to close in the second quarter of 2014, to spin out of SunTrust with the help of private equity shop Lightyear Capital. Watch for RidgeWorth CEO and chief investment officer Ashi Parikh and president Jim Stueve to expand their product and distribution reach as Lightyear puts capital into RidgeWorth.

"It's all about growth," Stueve tells MFWire, confirming that the leadership teams at RidgeWorth and its boutiques will remain intact. "The people that are in the chairs today will stay in the chairs tomorrow. We're just adding a great partner in Lightyear."

Parikh agrees, telling MFWire that, after years of planning for RidgeWorth's independence and evaluating options, they were "fortunate to find the right suitor."

"Lightyear stands out far above the rest ... They understand this space and they understand the volatility and what it takes to build," Parikh says. "They specialize in financial services. They will bring experience, they will bring a network of relationships, and very importantly they will bring growth capital that is much-needed to expand that product set."

The RidgeWorth team was very clear about what they wanted from a deal.

"We wanted to keep our brand, and we wanted to keep our infrastructure intact," Parik says. "There'll be no changes to our investment process, our investment strategies or personnel."

Indeed, in advance of the deal, Parikh says, they've been upgrading RidgeWorth's infrastructure, operations, technology and more.

"We have a very solid chassy, for boutiques and new partners. We're clearly going to continue our core growth," Parikh says, "but we're also going to supplement that with inorganic growth on the product and the distribution side."

RidgeWorth currently works with six boutiques, five of which it owns outright and the sixth in which it has a minority stake. Perhaps adding boutiques, by acquisition or affiliation is in the cards, though Parikh says that no specific deals are in the works just yet.

"We're going to continue to evaluate attractive opportunities that will fit with our network of boutiques," Parikh says. "We are very unique. We can offer potential partners as little or as much as they want from us."

RidgeWorth is currently strong "in plain vanilla equity and fixed income," Parikh says. He has some specific growth areas of interest in mind, in both distribution and product.

"We'd like to have a stronger international equity presence than we have right now," Parikh says, adding that he's also looking at alternatives and at hard assets like real estate. "On the distribution side, it might be broadening and deepening our intermediary partner relationships, including international expansion."

Parikh and Stueve are gung-ho about RidgeWorth's post-SunTrust growth prospects.

"It's all just coming into place," Stueve says. "We're coming off a record year."

"We like to call ourselves a $50-billion startup," Parikh says. "[The spinoff] is about writing the next chapter of our future." 

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