SouthernSun Asset Management [see profile], which operates the SouthernSun Small Cap Fund, is now a majority employee-owned firm. The Memphis-based investment manager has purchased the interests of several outside shareholders. Financial terms of the deal were not made public.

Michael Cook SouthernSun Asset Mgt Founder, CEO, CIO

Private equity firm Rosemont Investment Partners provided capital for the transaction and in exchange, took a minority stake in SouthernSun.

Equity participation is "one more economic tool that I have in my bag to incent people," said Michael Cook, SouthernSun's founder, CEO and CIO, in an interview with The MFWire.com on Wednesday.

The outside shareholders who sold their stake had owned a combined 60 percent of the firm. Now, SouthernSun employees own 51 percent of the company and Rosemont owns 44 percent, said Cook. The rest is owned by one other outside shareholder.

Founded in 1989, SouthernSun now manages $1.3 billion of assets in separate accounts and its mutual fund. The company has 21 employees.

Before deciding to link up with Rosemont, SouthernSun looked at four other parties.

"We looked at five different opportunities," he said. "The Rosemont model did everything for us that we wanted. I really don't have to go out and raise money again."

"Our expecation, based on mechanisms in place, is that within the next four to eight years, we'll be buying back Rosemont's interest," Cook said.

SouthernSun is Rosemont's 20th investment.

West Conshohocken, Pennsylvania-based Rosemont focuses exclusively on investments in asset managers. Its portfolio companies include Cadence Capital Management and Lateef Investment Management.  

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