Shields Preps For Merger

Shields Associatesis planning to merge with at least one other investment consulting firm to boost its resources in response to a rise in new business opportunities. Merging with another firm should add senior consultants to the team and bolster manager research. It will also bring an injection of capital to help improve resources and technology, and hire people. New business opportunities from foundations and endowments are up 30% compared to this time last year, saidBruce Graham, president. The firm is talking to 12 prospects at the moment, whereas in previous years eight prospects in January would have been considered a high number.

格雷厄姆,been in the business for 25 years, has a shortlist of firms in mind that Shields could merge with, although he declined to name them. He has discussed these firms with his colleagues but hasn't yet approached any of them. Nonetheless, Graham expects things to move forward fast. "We could do something in the next month, who knows? It could take three months." Graham thinks there will be opportunities to work with more than one firm.

The Stamford, Conn.-based consultant, which has approximately $20 billion in assets under advice, is seeking consultants of a similar size, namely 15-20 people. Above all, the firm it merges with must be independent. "That's got to be the mainstay of the culture; they've got to put the client first," he said. "Their culture, if anything, is what keeps me up at night." Shields and the firm it teams up with will consider taking ownership stakes in each other's businesses and will eventually become one firm. "Frankly I'd love a West Coast presence, but that depends on the people," he continued, adding that communications technology has made location less important. Shields has satellite offices in Cambridge, Mass., and West Palm Beach, Fla.

Shields' client base is predominantly corporate pension funds, foundations and endowments. When looking for firms to merge with, Graham is not focused on the type of client so much as the type of consultant, the strength of their knowledge and their relationships with clients. That said, he thinks the growth opportunities are the greatest in the foundation, endowment, high-net-worth and family office markets. About half the RFPs from foundations and endowments the firm is receiving are from funds that are seeking a consultant for the first time. "Quite a few foundations have grown to a size where they need it," he said. Of those funds that are seeking to switch consultants, many feel they are not getting sufficient attention from their incumbent advisors, he continued. Shields focuses on foundations and endowments that have $40-200 million in assets.

Corporate defined benefit pension plans, however, are freezing at an increasing rate. "We'll still continue to win DB clients, but I don't think you want to stake your firm's future on it," Graham said.