MutualFundWire.com: A Private Equity Firm Walks into The Mutual Fund Store

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Friday, July 29, 2011

A Private Equity Firm Walks into The Mutual Fund Store

Private equity shop Warburg Pincus is purchasing a majority stake in The Mutual Fund Store, confirmed Mutual Fund Store spokesman Paul Herdtner.

The deal will close in the coming weeks, Herdtner told The MFWire.com. The size of Warburg's stake and the amount of the investment were not made public.

Based out of Overland Park, Kansas, The Mutual Fund Store is one of the largest RIAs in the nation. Founder and CEO Adam Bold and his management team will continue to lead the Overland Park, Kansas-based RIA.

This is not the first time that The Mutual Fund Store has attracted private equity money. Back in February 2006 Summit Partners purchased a minority equity stake. Summit has now sold its stake, reports RIABiz.

Bold, reports the pub, continues to have a "significant stake" in The Mutual Fund Store.

Friday's news comes a month after trade publication InvestmentNews reported, citing an unnamed source, that The Mutual Fund Store is for sale, with the asking price between $300 million and $350 million. Responding to the report, Bold said the company is not up for sale, telling Dow Jones on June 27 that he has gotten "lots of inquiries from various companies that want to be involved in that growth in one way or another, whether it be from an equity position or providing financing ... and from a prudent business standpoint, I listen to what people have to say."

Morgan Stanley & Co, LLC served as The Mutual Fund Store's financial advisor and Bryan Cave LLP served as legal advisor on the transaction. For Warburg Pincus, Wachtell Lipton Rosen & Katz and Wilkie Farr & Gallagher served as legal advisors and Ernst & Young provided accounting diligence support.

Bold said in a press release Friday afternoon that the deal with Warburg Pincus "gives us the opportunity to grow and provide more hard working Americans the level of service and expertise our clients have come to expect."

Michael Martin, managing director and co-head of Warburg Pincus' financial services group, said: "We believe there is a tremendous opportunity to build on The Mutual Fund Store's success in providing sound investment advice to the mass affluent market."

Bold founded The Mutual Fund Store in 1996. The fee-only advisory firm, which targets the mass affluent clientele, now has counts more than 70 company-owned and franchised stores across the country. Bold also hosts a nationally syndicated radio program called "The Mutual Fund Show."

A Warburg Pincus spokesman said the private equity firm is not commenting beyond the press release.

Company Press Release

The Mutual Fund Store Announces Investment by Warburg Pincus

NEW YORK and OVERLAND PARK, Kan., July 29, 2011 /-- Warburg Pincus, a leading global private equity firm and The Mutual Fund Store today announced they are partnering to further expand and develop The Mutual Fund Store operations. The Mutual Fund Store is the first and largest nationally-branded registered investment advisor focused on hard working Americans. Warburg Pincus will bring its investment and expertise to the company that will continue to be run by founder and CEO Adam Bold and his management team. Terms of the transactions were not disclosed.

The Mutual Fund Store delivers independent fee-only investment advice to clients in more than 70 company-owned and franchised stores across the U.S. and its nationally syndicated radio program, "The Mutual Fund Show", which Bold hosts.

"We started The Mutual Fund Store more than 15 years ago to provide fee-only, independent investment advice to hard working Americans. Our message has resonated with this group of people who have been largely ignored by the traditional financial services industry," said Adam Bold, founder of The Mutual Fund Store. "We are very excited to partner with Warburg Pincus. This gives us the opportunity to grow and provide more hard working Americans the level of service and expertise our clients have come to expect."

Michael Martin, Managing Director and Co-Head of Warburg Pincus' Financial Services Group, said, "Through a commitment to an underserved market and an alignment of interests with its customers, The Mutual Fund Store has built a loyal following across the U.S. We believe there is a tremendous opportunity to build on The Mutual Fund Store's success in providing sound investment advice to the mass affluent market. We are excited about partnering with Adam and the rest of The Mutual Fund Store team to accelerate the company's growth plans."

Morgan Stanley & Co, LLC served as financial advisor and Bryan Cave LLP served as legal advisor to The Mutual Fund Store. Wachtell Lipton Rosen & Katz and Wilkie Farr & Gallagher served as legal advisors and Ernst & Young provided accounting diligence support for Warburg Pincus.

About The Mutual Fund Store

Founded in 1996, Kansas City-based The Mutual Fund Store is the first and largest nationally-branded investment advisor focusing on the mass affluent customer. By specializing in mutual funds, The Mutual Fund Store is able to differentiate itself from other investment advisors by providing a level of fee-only, independent investment advice that is often available to only the very wealthy. Clients get tailored investment advice with a focus on individual needs and risk tolerance, to save for retirement, a new home or a child's college education.

The Mutual Fund Store delivers investment advice through more than 70 regional stores across the U.S. and its nationally syndicated radio show, "The Mutual Fund Show", which airs in 60 markets across the U.S. and is hosted by The Mutual Fund Store's founder, Adam Bold.

About Warburg Pincus

Warburg Pincus is a leading global private equity firm. The firm has more than $30 billion in assets under management. Its active portfolio of more than 125 companies is highly diversified by stage, sector and geography. Warburg Pincus is a growth investor and an experienced partner to management teams seeking to build durable companies with sustainable value. Founded in 1966, Warburg Pincus has raised 13 private equity funds which have invested more than $35 billion in over 650 companies in more than 30 countries.

Current and past financial sector investments include, Arch Capital Group, Aeolus Re, DIME Bancorp, HDFC, Kotak Mahindra, Mellon Bank, National Penn Bancshares, Primerica, Renaissance Re, Sterling Financial, and Webster Financial.

The firm is headquartered in New York with offices in Amsterdam, Beijing, Frankfurt, Hong Kong, London, Luxembourg, Mauritius, Mumbai, San Francisco, Sao Paulo and Shanghai. For more information, please visit www.warburgpincus.com.