April 18, 2019
Open Letter to Manning & Napier, Inc Board of Directors
In the past months I have corresponded frequently with Chairman William Manning, We have shared many of the same concerns about the direction Manning Napier, Inc is heading. As some adjustments have been made. Still there is no long term plan for the company.
The board has allowed the company to decay, while not moving forward with any real strategic changes, as a result shareholders have paid the ultimate price, watching their share value diminish and and break the $2 price.
Chairman William Manning and I both agree there is great value in Manning & Napier, Inc that might well be obliterated if we do not make drastic changes immediately.
They’re many problems at Manning & Napier, Inc as a staunch critic of the board and management I see only one direction that makes sense for everyone, including board members, insiders, stockholders, and employees. That is to sell the company to an (ESOP) Employee stock ownership plan.
ESOPs (Employee stock ownership plan) are attracted and tax favored alternative. For insiders the gains from a ESOP sale can be tax deferred by reinvesting in securities of other domestic companies called a 1042 exchange.
Manning & Napier, Inc would receive a far more premium to market value, than anyone else would pay. There would be favorable tax treatment for insiders, and large shareholders. The ESOP can acquire any percentage of the company. ESOP can preserve the legacy of Manning & Napier, Inc. The ESOP awards management and employees. ESOP is a valuable retirement benefit to employees. Employees can participate in the value they will help to create. ESOP prevents consolidation of loss of jobs and loss of assets under management that will happen if there is a buyout or merger. ESOP has a greater potential for productivity and reduced turnover.
The ESOP aligns the interest of the financial investors with the interest of the employees. Owning shares can give the employees a larger say in the decisions of the company. As a result, workers in a ESOP have doubled retirement savings on average.
Manning & Napier, Inc cannot achieve a premium price above the current market share by selling to a competitor or to a buyout firm. If this does happen. Manning & Napier, Inc will be consolidated, employees, which will be laid off, and assets under management that will be redeemed.
Manning Napier, Inc has failed for the last several years, suffering lack of leadership, and direction at the expense of shareholders. An ESOP paves a way way for a new direction that will allow the company to be acquired at a higher price than any suitor will pay.
An ESOP keeps jobs, keeps the company alive, allows for a premium acquisition price, and allows the employees to work together in a more creative way to prosper the company.
Zarvic has formed a group of ESOP professionals that include ESOP attorneys to facilitate this deal at a reasonable cost. The situation is in the best interest for board members, employees, and shareholders.
In a dictatorship the oppressed face prison or death if they rebel and attempt to remove the dictator. However in a democracy, including the corporate democracy that ostensibly exists in the United States, all we must do is vote the oppressors out.
Shareholders can hold management accountable no matter what the magnitude of the transgressions committed by their boards or how costly those transgressions are to the shareholders. All stockholders must do is check a proxy card and literally overnight the company becomes more valuable and sometimes is even saved from going over the proverbial cliff.
IMPORTANT DISCLOSURE INFORMATION
THIS LETTER CONTAINS OUR CURRENT VIEWS ON THE VALUE OF SECURITIES OF MANNING & NAPIER INC. OUR VIEWS ARE BASED ON OUR OWN ANALYSIS OF PUBLICLY AVAILABLE INFORMATION AND ASSUMPTIONS WE BELIEVE TO BE REASONABLE. THERE CAN BE NO ASSURANCE THAT THE INFORMATION WE CONSIDERED AND ANALYZED IS ACCURATE OR COMPLETE. SIMILARLY, THERE CAN BE NO ASSURANCE THAT OUR ASSUMPTIONS ARE CORRECT. THE ACTUAL PERFORMANCE AND RESULTS OF MANNING & NAPIER INC. MAY DIFFER MATERIALLY FROM OUR ASSUMPTIONS AND ANALYSIS.
WE HAVE NOT SOUGHT, NOR HAVE WE RECEIVED, PERMISSION FROM ANY THIRD-PARTY TO INCLUDE THEIR INFORMATION IN THIS LETTER. ANY SUCH INFORMATION SHOULD NOT BE VIEWED AS INDICATING THE SUPPORT OF SUCH THIRD PARTY FOR THE VIEWS EXPRESSED HEREIN.
OUR VIEWS AND OUR HOLDINGS COULD CHANGE AT ANY TIME. WE MAY SELL ANY OR ALL OF OUR LONG POSITIONS, OR INCREASE OUR LONG EXPOSURE BY PURCHASING ADDITIONAL SECURITIES. WE MAY TAKE ANY OF THESE OR OTHER ACTIONS REGARDING MANNING & NAPIER, INC. WITHOUT UPDATING THIS LETTER OR PROVIDING ANY NOTICE WHATSOEVER OF ANY SUCH CHANGES (EXCEPT AS OTHERWISE REQUIRED BY APPLICABLE LAW).
THE INFORMATION CONTAINED ABOVE IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT WHICH THE SECURITIES OF MANNING & NAPIER INC. MAY TRADE AT ANY TIME. THE INFORMATION AND OPINIONS PROVIDED ABOVE SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION. INVESTORS SHOULD MAKE THEIR OWN DECISIONS REGARDING MANNING & NAPIER INC. AND THEIR PROSPECTS BASED ON SUCH INVESTORS’ OWN REVIEW OF PUBLICALLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED ABOVE. NEITHER ZARVIC BROTHRS LLC NOR ANY AFFILIATES ACCEPTS ANY LIABILITY WHATSOEVER FOR ANY DIRECT OR CONSEQUENTIAL LOSS HOWSOEVER ARISING, DIRECTLY OR INDIRECTLY, FROM ANY USE OF THE INFORMATION CONTAINED ABOVE.
Certain statements contained in this letter are forward-looking statements including, but not limited to, statements that are predictions of or indications of future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties. Forward-looking statements are not guarantees of future performance or activities and are subject to many risks and uncertainties. Due to such risks and uncertainties, actual events or results or actual performance may differ materially from those reflected or contemplated in such forward-looking statements. Forward- looking statements can be identified by the use of the future tense or other forward-looking words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “should,” “may,” “will,” “objective,” “projection,” “forecast,” “continue,” “strategy,” “position” or the negative of those terms or other variations of them or by comparable terminology.
Important factors that could cause actual results to differ materially from the expectations set forth in this letter include, among other things, the factors identified under the sections entitled “Risk Factors” in MANNING & NAPIER Inc.’s Annual Reports on Form 10-K for the year ended December 31, 2017 as well as the factors identified in MANNING & NAPIER Inc’s other public filings. Such forward-looking statements should therefore be considered in light of such factors, and we are under no obligation, and expressly disclaim any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.