What is Tom Marsico
doing out in Denver? Bloomberg Business Week
breaks some news from the boutique mutual fund shop that may raise as many questions as it answers. According to the report, Marsico's
] top brass has cut their ownership stake along with the firm's debt.
Why they are restructuring the firm's capital structure is not clear. The move also follows the departure of PMs Doug Rao, Joshua Rubin and Charlie Wilson
so far this year.
reporter Beth Jinks relies on three people "familiar with the situation" for her report:
The agreement with creditors shrank Marsico’s senior debt to about $500 million from $1 billion, and junior debt to about $200 million from $600 million ... Under the terms, the debt now matures in 2022, and creditors are eligible for distributions from management fees to service debt.
The other important detail is that Marsico's management team will retain voting control of the mutual fund manager even as the stake held by outsiders climbs above 50 percent — much like Mark Zuckerberg
's arrangement following the Facebook
She also interviewed Neil Gloude
, Marsico's CFO, who related that all of the "senior and junior creditors agreed to the restructuring." Houlihan Lokey was reportedly the adviser to the junior creditors and Moelis & Co. advised Marsico.
The last time that Marsico restructured in 2010 may provide some clues as to what is happening now. In that event, the money manager swapped 19 percent of its equity for $1.04 billion in debt. Its total debt stood at $2.7 billion at that time.
Marsico's debt was created by its 2007 leveraged buyout from Bank of America. That deal was valued at $2.5 billion at the time.
The report adds that Marsico claimed 65 employees, including 18 investment professionals, at the end of July.
Sean Hanna, Editor in Chief
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