For some morning schadenfreude, try yesterday's Fund Spy column on Tom Marsico's
Morningstar senior mutual fund analyst Karin Anderson looks at the troubles
at Marsico Capital Management
over the last five years, from its 2007 buyback through its recent "mixed" results.
Anderson says the firm paid a "whopping" price to go private in 2007, taking on $2.5 billion in debt to "ensure its legacy as a stand-alone asset manager." The problem, of course, is that Tom Marsico took the company private at its high-water mark — AUM declined from around $110 billion to $43 billion in the three years following the buyback.
Since then, moreover, several debt restructurings have forced Marsico's employees to give back controlling ownership of the firm. In 2010, creditors took on 49 percent of the company's equity; the debt was restructured again this year, reducing the stake of Marsico and his employees to just under 40 percent, but putting off repayments for ten years.
Anderson also shows how Marsico's funds have been struggling since the buyback. And she details the string of PM departures and lost subadvisory contracts over the last few years.
All together, she says, "it will likely be a slow road to recovery" for Tom Marsico and his shop.
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