Partnership?

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Jan 7, 2007 6:54 am

I've got roughly 15 million AUM, and an office-mate 3 yrs from retirement (w/ 125 million) wants to discuss a "succession" strategy.  Could some of you describe the various agreements/structures and note some pros and cons?  What alligators should I be aware of?

Jan 7, 2007 9:58 am

NOVA, I've got a briefcase with a million dollars in it. I would like to hand it to you. What do you do?


A. Think about it.


B. Post it on a stupid chat board.


C. Grab it!


The correct answer is C.


Let's review: You've got nothing. An office mate has everything. And your're worried about alligators?


Jan 7, 2007 12:41 pm

anyone else have any thoughts?  What agreements work?

Jan 7, 2007 12:48 pm

NOVA, uuhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh, its called this guy needing to give his book to someone, and you appear to be it, or part of it at the very least. I dont think there is anything to contemplate....

Jan 7, 2007 1:24 pm

Yeah, right, he's just looking to GIVE away his $125MM book.


Mr. A

Jan 7, 2007 1:40 pm

anonymous, if not give then what do they as for in return?

Jan 7, 2007 2:28 pm

Lex123,


The correct answer to your quiz is "A". 


Succession comes with a cost.  It may or may not be worth being involved.

Jan 7, 2007 2:48 pm

Anonymous...so how might this play out?  20/80% to 80/20% over time...50/50%?  Are there industry norms?  The answer is definitely A, I'm trying to anticipate a couple options for how this might work out.

Jan 7, 2007 3:01 pm
NOVA:

Anonymous...so how might this play out?  20/80% to 80/20% over time...50/50%?  Are there industry norms?  The answer is definitely A, I'm trying to anticipate a couple options for how this might work out.




Hey here's a crazy idea.....why don't you sit down and have lunch with the guy and ask him to describe what he has in mind?  Don't commit to anything, be careful about even giving him a lot of feedback at this point, but let him know you're interested in hearing his proposal.

If you "think about it" too long before taking the time to hear what he has to say, he's going to presume either a.)  You're not enough of a go-getter to bring on board, or b.) You're not interested for some reason.  Either conclusion would lead to a bad outcome for you, right?

Jan 7, 2007 3:35 pm

Say, sure I would love to talk about it. Then close your mouth. If you

decide not to, give me a call first.