Vista 360 LLC, a Milwaukee-based consulting firm that assists investment advisors and mutual fund companies with regulatory compliance and strategic issues, expects to gain business in the future by assisting mutual fund companies with mergers and acquisitions. The firm has not assisted with any mergers or acquisitions since the company was formed in September of 2002. However, the company’s principals believe that merger and acquisition activity in the mutual fund industry will pick up in future years, and they are hoping their business will be positioned to take advantage of that opportunity.
"This industry will evolve to a point where we will see much more M&A activity," said Jeff Squires, one of the firm’s principals. "It’s still a new and growing industry."
Vista 360’s principals, Squires and Laura Rauman, have significant experience working on M&A deals.
Previously, they worked together as executives with FIRMCO, the investment subsidiary of Firstar Bank, which later acquired and took the name of U.S. Bank.
The pair led FIRMCO through three mergers in three years.
Customers have not asked for Vista 360’s strategic services very much during the company’s 2-1/2 years of operation. The majority of the firm’s clients, including Milwaukee-based Robert W. Baird & Co. Inc., Racine-based Johnson Asset Management, Chicago-based Horizon Cash Management and Cincinnati-based Gateway Investment Advisers, have asked mainly for help with U.S. Securities & Exchange Commission compliance issues.
With the growing need for regulatory compliance in the mutual fund industry, Vista 360 has opened a new Chicago office, which is overseen by Peter Lambesis.
Due to the heavy focus on compliance by mutual fund companies and advisors, merger activity within the industry is at a low now, Squires said.
"Their focus has been in compliance and a challenging market," Squires said. "And our target market is mostly independent organizations. And a lot of them aren’t looking to merge or be acquired yet."
However, Vista 360 is betting that will change in the future, as its clients, many of whom are relatively new, smaller advisors or fund companies, grow.
"We expect it to expand significantly," he said. "There is not a ton of M&A activity out there in the investment community. In 10 to 15 years from now, it could be very different.
"We can help identify issues through due diligence, but our real value is in the nuts and bolts of going through the actual merger or acquisition," Squires said.
Because of his past experience in the M&A field, Squires has developed three key considerations for due diligence when a company is considering buying another firm. They are:
1. Look carefully at strategic and financial matters.
2. Dig deeper than the senior management level. Do everything you can to flesh out the skeletons in the organization’s closet to discover which personnel issues you may inherit.
3. Assess the culture of the organization. Question employees, if possible, as well as vendors and customers. How well will the culture fit into the combined organization?
If a merger or acquisition is approved after due diligence is completed, Squires also suggests remembering some other key considerations, including:
• Leave the "who bought who" attitude at the door, because buy-in will be needed from employees of both organizations.
• Communicate your plan clearly up front. Explain why this merger, even though it may be difficult, will result in a better organization for everyone. Be realistic.
• Don’t make it a "slow death" for employees who may be downsized due to redundancies. Make the difficult decisions as soon as possible with the understanding that no decision can ever be final.
• Dedicate the necessary resources to accomplish the merger. Requiring personnel to take care of both their normal job and tasks for the merger may result in them not doing either well.
• Focus on the end result and make decisions based
on which company has the best process for certain functions, which will result in the best solution for the combined company.
Squires and Rauman were both offered leadership positions with U.S. Bank’s home office in Minneapolis, after the company moved its headquarters there from Milwaukee, but neither accepted the offers.
In spring 2002, they started talking about the concepts that eventually led to the formation of Vista 360.
"We saw that there was a business model out there to help small- to medium-size mutual fund advisors with compliance-type matters," Rauman said. "Advisors tend to run fairly lean, because they’re under resource constraints. Until they reach a certain scale, they aren’t able to bring in senior level resources."
Vista 360 LLC
Industry: Business consulting for financial advisors
Address: 828 N. Broadway
Web site: www.vista360llc.com
Employees: 5
May 27, 2005, Small Business Times, Milwaukee, WI
