The Mutual Fund Store, one of the largest registered investment advisory firms in the country, is up for sale, according to two sources familiar with the matter.
JPMorgan Chase & Co. is said to be shopping the firm, which has $6.4 billion in assets and 68,000 client accounts, on behalf of its founder, Adam Bold. The asking price is between $300 million and $350 million, according to one source, who asked not to be named but was familiar with specifics regarding the deal.
A second source, who also asked not to be named, said he had heard a potential sale of the Mutual Fund Store “was quite an extended process” and that the firm “had been on the market quite some time.” The source added he had no direct knowledge of a potential transaction.
On Tuesday morning, Mr. Bold told
InvestmentNews he had “no comment” about any transaction involving his firm. When asked if J.P. Morgan was the banker handling a potential deal, he reiterated that he had no comment about the matter.
Mr. Bold, however, yesterday told at least three other news organizations that the firm was not for sale. According to a report yesterday on Dow Jones Newswires, Mr. Bold said that he and his management team “are focused on executing our business plan; we're not going anywhere.”
Mr. Bold has had frequent discussions with potential investors in the firm, according to Dow Jones. As the Mutual Fund Store has grown, Bold said, he has received “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.”
Mr. Bold founded The Mutual Fund Store LLC in 1996. With headquarters in Overland Park, Kan., it now has more than 70 franchises across the country. While Wall Street firms largely shun small investors, the minimum for a new client to invest with The Mutual Fund Store is $50,000.
The firm was recently ranked No. 3 on InvestmentNews' list of top fee-only RIAs (as measured by discretionary assets under management as of March 31).
Mr. Bold, who is seen frequently on CNBC and Bloomberg Television, also hosts a weekly radio show, “The Mutual Fund Show.”
A competitor said that employees of The Mutual Fund Store have been making inquiries in recent weeks. “I can't say I'm totally surprised,” said Ric Edelman, president and co-CEO of Edelman Financial Group Inc., which has $6.7 billion in assets under management, and 22 branches and is expanding.
Mr. Edelman said he did not know that The Mutual Fund Store was on the block. “We've looked at his business model for years and never really understood a lot of the economics,” Mr. Edelman said, without citing specific details. “We've had phone calls from people in his organization over the last couple of months. We weren't sure why that was happening.”
Both Mr. Edelman and Mr. Bold have radio shows in strategic markets in the United States, Mr. Edelman noted, and have offices in those markets. Both firms also have low asset minimums, serving clients with as little as $50,000 to invest.
But Mr. Edelman noted that the firms do differ in some ways: The Mutual Fund Store is a franchise operation and Edelman Financial is not. The Mutual Fund Store also stresses actively managed mutual funds, while Edelman Financial emphasizes
financial planning and diversification, Mr. Edelman said.
Meanwhile, The Mutual Fund Store has announced aggressive growth plans. The company aims to open a dozen more offices this year and two dozen the next.
About Mr. Bold, Mr. Edelman said: “If he can get a $300 million valuation, God bless him. He's built a very successful organization.”
