The buyout drama around a $4.1-billion-AUM (as of March 31), 10-fund, publicly traded asset manager gained a new wrinkle last week, when the firm's would-be acquirers publicly attacked their target's chief over a disclosure issue.

Frank Edward Holmes U.S. Global Investors, Inc. CEO, Chief Investment Officer

Last Tursday, Ephraim Fields, founder of Echo Lake Capital, and Glenn Tongue, of Deerhaven Capital, sent an open letter to the board of directors of U.S. Global Investors [profile] (GROW). The letter expresses concern that Nigel Holmes, the son of Frank Holmes (CEO, board member, and controlling shareholder of U.S. Global Investors), has been hired by the company three times over the past decade (as an investment analyst and investment consultant) without disclosures to the company's shareholders.

Holly Schoenfeldt, director of marketing at U.S. Global Investors, did not respond to MFWire's request for comment.

The letter raises the specter of "the taint of nepotism" and ethical concerns, as well as worries about employee morale.

"The revelations regarding Nigel's employment heighten our concerns that GROW is really being run for the benefit of a select few individuals rather than for the benefit of all shareholders," Tongue and Fields conclude at the end of their letter.

The letter comes after Tongue and Fields publicly offered, back on June 27, for their firms to buy U.S. Global Investors. On July 1, the U.S. Global Investors team publicly rebuffed the Echo Lake and Deerhaven offer, saying that it doesn't provide the company's shareholders "with appropriate value." 

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