How They Did It: Navigating a Successful MBO

Rosemont Roundtable: Exploring the Business of Investment Management (Formerly Global Investment Leaders)

As we shared at the end of the year, the Global Investment Leaders podcast is expanding to include a new sub-series called How They Did It, hosted by Rosemont Managing Director Brad Mook. How They Did It will feature bi-monthly interviews with industry leaders about how they solved certain strategic challenges. Our goal is to tap the insights of our network of industry insiders to help others that may be facing similar challenges.

The first episode of the How They Did It sub-series discusses management buyouts, or MBOs, which are rarely successfully executed in the modern investment industry. In this episode, Mook interviews Todd Vingers, CFA, who serves as president of the recently launched Leeward Investments, a Boston-based institutionally-focused long-only equity manager featuring US small-, SMID-, and mid-cap value strategies. In their conversation, Mook asked Vingers about the context, motivation and mechanics behind Leeward’s MBO. While many would like to spin out or buy out their franchise, it is often harder than it looks and there is little in the way of guidance with how to proceed.

To help those who may be considering becoming independent of a parent organization, Vingers shared about his background at his prior firm, LMCG, where he spent 20 years establishing and building the value team. Mook and Vingers also discussed the many factors Vingers and his partners considered when forming Leeward, including:

• What led Vingers and his partners to seek independence, despite having a successful business and significant resources and infrastructure
• How evolving into a 100% employee-owned entity opened up opportunities that were not available under the previous ownership structure
• The extended timeline to reach a negotiated transaction with their parent organization and why they did not consider other alternatives
• The key issues coming out of the negotiation, from people to pricing to the structure of the deal
• The critical components of setting up Leeward to be an immediate success, including which functions remained in-house and which were outsourced
• The strategy Vingers and his team used to communicate the transition to clients, which led to 93% revenue retention

All episodes of the Global Investment Leaders podcast are available on Apple Podcasts, Spotify, Google Podcasts and more. Receive the episodes as soon as they premiere by subscribing today.