London-based Northill Capital has agreed to buy a majority interest in Riverbridge Partners, a Minneapolis-based specialist investment manager of small, mid and large cap US equity growth portfolios for institutional and high net worth investors.
Riverbridge also reportedly plans to launch a mutual fund version of its Riverbridge All Cap Growth Portfolio in January.
Northill’s investment in Riverbridge represents approximately 58% of the firm’s equity, buying out 100% of the equity of retired or former partners of the firm and just under 50% of the equity of the existing management team led by Riverbridge founder and chairman, Mark Thompson.
In line with Northill’s strategy to ensure management retains a high degree of autonomy, Riverbridge will continue to be based in Minneapolis and will be operated by its existing management team.
As a result of the deal, members of the Northill management team will join the Riverbridge Board and all existing Riverbridge Board members will remain in place. Existing Riverbridge equity owners will hold all their remaining equity for a minimum of five years and each will reinvest half their net proceeds in Riverbridge’s investment strategies.
Riverbridge was founded in 1987 and currently manages nearly $4 billion in assets.
"Despite our relatively young management team, Riverbridge must eventually address its own succession. Many firms never solve this problem, which is why they are either sold or experience a collapse when the founder departs," stated Thompson.
"Our partnership with Northill ensures that Riverbridge will remain an employee-owned firm and, importantly, enable us to more easily broaden our equity ownership to the next generation of leaders.”
Jon Little, partner, Northill Capital, added: "Riverbridge is a great firm and fits exactly with the profile of business in which we look to invest – it is investment-led with a collegiate ‘no stars’ culture and a continuous commitment to the enhancement and development of its team and capabilities.”