Ultimus Is Making Its First Acquisition. Here's Why.
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Friday, November 20, 2015

Ultimus Is Making Its First Acquisition. Here's Why.

Bob Dorsey and his team are about to double their client base, increase their assets and headcount by 50 percent, and increase their fund count by 69 percent.

Bob Dorsey
Ultimus Fund Solutions
Co-Founder, Managing Director
Cincinnati-based, privately-held Ultimus Fund Solutions is making its first acquisition, buying competitor Huntington Asset Services, Inc. (HASi) (and HASi's sister company, Unified Financial Services) from publicly-traded Columbus-based Huntington Bank. Don't expect Ultimus to rush into any other deals just yet.

"You never say never," Dorsey tells MFWire. "We're probably going to take our time, make sure everything gets integrated correctly. The devil's in the details."

Separate from the deal, Ultimus just reached 100 employees this week, Dorsey says, with "three or four more in the queue." He estimates that about 50 of HASi and Unified's 71 employees will join Ultimus as part of the deal. That includes HASi veteran Jeff Young, who took over the unit this spring as president.

"Jeff will be playing a strategic role going forward," Dorsey says.

The deal, slated to close by the end of December, started coming together three or four months ago, Dorsey says. Ultimus did not work with an investment bank or consultant on the deal, and the pricing and terms have not been disclosed.

"We've always been interested in growing organically. We also were very interested in doing an acquisition that we thought was a good strategic fit," Dorsey says. "When the folks at Huntington approached us ... we said, 'Yeah, we're interested!'"

We know those folks well. We know their business well. We've competed against them for years. We've got a lot of respect for them ... What we're really excited about is the talent they, industry veterans and long-tenured employees with strong client relationships.

"The transition to Ultimus is intended to be as seamless as possible for customers," Huntington spokesman Seth Seymour tells MFWire in an e-mailed statement. "For asset servicing, it is increasingly necessary to have significant scale and technology in this highly competitive market. We have chosen a firm we believe can provide the best long-term service to our clients."

Dorsey describes the deal as "just a good strategic fit," in part because of HASi and Unified's presence in Columbus and Indianapolis. Both of those cities, he notes, are less than a two-hour drive from Ultimus' headquarters near Cincinnati. And both are, in Dorsey's words, "vibrant cities" with lots of financial services. Ultimus will maintain offices in both Columbus and Indianapolis, though once the deal closes they will move out of Huntington's spaces and into new offices in both of those cities.

"It opens up another two markets to be able to recruit talented people," Dorsey says.

Another key win for Ultimus, Dorsey says, is the Huntington team's tax department. Ultimus does not currently have such a team internally.

"We're excited about having their tax professionals in-house," Dorsey says.

Unlike HASi and Unified, which are units within a publicly-traded bank, Ultimus is privately held. Dorsey and his partner own 50 percent of Ultimus, and Philadelphia-based LLR Partners owns the other 50 percent.

Ultimus' 100 employees, Dorsey says, currently support 43 clients with 105 funds and about $20 billion in assets. HASi and Unified's 71 employees support 41 clients with 72 funds and $10.8 billion in assets.

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