Rochester, New York, September 19, 2018 — Today, Zarvic Brothers released the following open letter to shareholders and board of directors of Manning & Napier, Inc.
Dear Board Members
In the wake of the poor performance of the company's stock price, it is abundantly clear Manning and Napier must reorganize its company structure and management.
In a recent discussion with chairman, William Manning, it was reassuring knowing he believed our board of directors would prioritize shareholder interests over the agendas of current CEOs and the Board will definitely listen, take notice, and pay attention to what shareholders want. I was pleased to hear of this open mindedness because I believe management's credibility with shareholders is all but gone.
I anticipate management is incapable of formulating a dynamic reorganization and will resort to cost cutting which will only produce unnoticeable incremental changes. If this occurs, it will only serve to reinforce the markets conclusions about the company's inept management.
It is my hope that finally our board will take matters into their own hands if management resists drastic change.
As I told Mr. Manning, management refuses to discuss alternatives for this company including a merger of the company or a sale so our Assets Under Management can be monetized before they entirely dissipate due to management's failure in meeting the needs of our customers. I am sure they fear consolidation may conflict with their personal interests.
The stock market has been on the biggest bull run in history. Manning & Napier's business is investing in this market. Yet they have not enhanced the value of the stock price.
In the October 2, 2017 Pension & Investment article written by James Comtois he has comments by Mr. Coons have left us perplexed.
Mr. Coons also said the firm does not have any plans or strong impetus to either pursue M&A options or become a private company again (Manning & Napier went public in November 2011). However, he conceded senior leadership hasn't ruled out such options. "Nothing's precluded," he said.
Mr. Coons said the leadership change "was a statement of reinforcing who we are, who we've been, and who we should continue to be." He also confirmed that Mr. Manning was not taking on the role of CEO on an interim basis.
"We have a strong balance sheet," said Mr. Coons in a Sept. 25 interview. "Financially, we are not challenged as a firm."Mr. Coons added that, despite reorganizing the investment teams, the company hasn't "changed anything about who we are or what we do or how we serve our clients." "It's the same firm, the same investment process," he said.
These are direct quotes taking from Pension & Investments October 2, 2017 BY: James Comtois.
September 2018: Zacks Investment Research lowered Manning & Napier Rating to Sell.
We believe that to meet the minimal expectations of shareholders Manning and Napier must address these concerns:
1. Must immediately stop systematic annual shareholder redemptions by all members of M&N Group Holdings, LLC. This is an unfair advantage to shareholders of the public company and has resulted in destroying shareholder value. And dissolve M&N Group Holdings, LLC.
2. Commit to streamline operations and focus on transforming the company into a pureplay investment manager by committing to sell, spin, or otherwise separate non-core operations such as the mutual fund business.
3. Commit to fixing the investment model so that it can generate competitive double digit returns on equity (ROE) through an improved broader range of strategies and bringing outside talent.
4. We feel based upon the performance, management should take significant pay cuts and work for bonuses based on performance, as well as replacing current management. Chuck Stamey's total compensation $1,455,511.00 Ebrahim Busheri total compensation $1,989,899.00 Jeff Coons total compensation $500,000+ Richard Yates compensation $700,000
5. Break up the partnership or separate the companies to increase shareholder value. The structure is too complicated for shareholders to understand.
6. Forming a shareholder committee that works in conjunction with current board of directors which will provide shareholders a level of optimism in knowing our interests are represented.
It would be a mistake to squander away the final vestiges of what was previously an innovative and well-respected financial institution. I am hopeful our board will be receptive to our concerns and work towards protecting our equity interest from further decline.
We look forward to engaging with board members and management regarding the future direction of the company in the coming weeks.
Cautionary Statement Regarding Forward-Looking Statements:
The information herein contains "forward-looking statements." Specific forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and include, without limitation, words such as "may," "will," "expects," "believes," "anticipates," "plans," "estimates,""projects," "targets," "forecasts," "seeks," "could," "should" or the negative of such terms or other variations on such terms or comparable terminology. Similarly, statements that describe our objectives, plans or goals are forward-looking. Forward-looking statements are subject to various risks and uncertainties and assumptions. There can be no assurance that any idea or assumption herein is, or will be proven, correct. If one or more of the risks or uncertainties materialize, or if Zarvic's underlying assumptions prove to be incorrect, the actual results may vary materially from outcomes indicated by these statements. Accordingly, forward-looking statements should not be regarded as a representation by Zarvic that the future plans, estimates or expectations contemplated will ever be achieved.
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