"Oh, it's good to be back."
| David Perkins|
Chief Executive Officer
, CEO of Hatteras Funds
], quoted that line from a Jaguar commercial when talking about the 12-year-old alternative mutual fund boutique's just-announced plans to spin itself back out
of beleaguered parent RCS
. RCS bought Hatteras in June 2014, and Hatteras' management is now buying the fund shop back, without any private equity help. The deal is expected to close in early 2016.
"We're paying $5.5 million in cash to RCS Capital. In addition, we're relieving them of the liability of the earnout and some delayed payments that will be due in the future," Perkins tells MFWire
. "We're going to make all of our non-employee shareholders whole."
The cash part of the price translates into 0.32 percent of Hatteras' $1.7 billion in AUM.
"This is all done employee-based. We're not doing an ESOP plan," Perkins says. "There's a short list of employees here who are part of a management buyout group."
Hatteras has had a long relationship with Berkshire's Ted Gooden
, Perkins says. Gooden helped Hatteras with deals like buying its mutual fund platform and selling to RCS, and now he's helping management buy the shop back.
As for why the Hatteras team is parting ways with RCS, Perkins says that in talking to financial advisors and Hatteras employees alike, he heard them say, "We want the old Hatteras back."
"It was the culture. It was a small, alternative investment boutique that put the client first and tried to solve issues in implementing alternative investments from the FA's point of view," Perkins says. "It was time for us to get back to that ... Some people like staying at a boutique hotel."
"We entered into the deal with RCS thinking that one plus one was going to be three or four or four. It just didn't work out," Perkins adds. "We've got a saying here at Hatteras. If you're wrong, don't be wrong long."
As for RCS' recent troubles, Perkins says, "that adversity created an opportunity for us to get out of their way."
Perkins says he looks forward to the opportunity to focus more on that old vision of Hatteras that his FA allies and employees describe.
"We're going to focus on what we do best," Perkins says. "We're going to take the funds that we have and make them better."
Hatteras now has 48 employees. Don't expect that to change much anytime soon.
"I don't see us going to 30 and I don't see us going to 60," Perkins says. "We're a good size."
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