A multi-boutique asset management near Philadelphia is snapping up a 32-year-old, $2.5-billion-AUM (as of November 30, 2022) equity fund firm near Milwaukee.

Marc Brookman Spouting Rock Asset Management CEO

Yesterday, Marc Brookman, CEO of Spouting Rock Asset Management [profile], and Jim Reinhart, president and CEO of Reinhart Partners, Inc., confirmed that Bryn Mawr, Pennsylvania-based Spouting Rock has agreed to buy a majority stake in Mequon, Wisconsin-based Reinhart Partners. The deal is expected to close this quarter (i.e. in Q1 2023), and the pricing and terms have not been publicly revealed.

According to the Spouting Rock folks, the Reinhart Partners team is expected to join Spouting Rock after the deal. Per Reinhart Partners' most recent form ADV, filed on October 18, 2022, the boutique has a team of 20 workers (not counting clerical staff). Reinhart founded the firm in 1991, and it specializes in concentrated portfolios of small and mid-cap stocks. The firm offers three flagship strategies and a trio of mutual funds: the $290.4-million Reinhart Genesis PMV Fund (which launched in June 2018); the $1.2-million-AUM Reinhart International PMV Fund (which launched in June 2022); and the $177.1-million-AUM Reinhart Mid Cap PMV Fund (which launched in June 2012).

"High-quality, research-driven stock selection is the foundation of the investment philosophy at Reinhart Partners," Reinhart states.

Reinhart himself is currently the plurality shareholder of his eponymous firm. Per the form ADV, he owns between 25 and 49 percent of Reinhart Partners, while Rick Plawecki (senior account manager, principal, and director of institutional client services) owns between 10 and 24 percent, Brent Jesko (senior portfolio manager, principal, and chief investment officer) owns between 5 and 9 percent, and Sandra King (chief compliance officer) owns less than five percent. The Spouting Rock team expects Reinhart himself to stay on in a leadership role.

Brookman puts the Reinhart Partners deal in the context of Spouting Rock's current "period of strategic expansion," which emphasizes platform growth via "forward-thinking investment solutions."

"Reinhart's longstanding commitment to client service along with recruiting and retaining a team of talented investment professionals, will be extremely additive to the Spouting Rock platform," Brookman states. "We think now is a great time to acquire stakes in boutique alpha-generating managers like Reinhart, despite the challenging market environment. We firmly believe in the long-term growth potential of these types of asset managers, including long-only and alternatives."

Reinhart, for his part, lauds Brookman and the Spouting Rock team for having "the same commitment to quality in client service and investment management solutions."

"We are delighted to join forces as they continue to build out their asset manager platform," Reinhart states. 

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