CHICAGO - Harris Associates, sponsor of the successful Oakmark mutual funds, is looking at strategic alternatives for the company, including a possible sale.
Investment bankers estimate the 18-year-old firm - which manages $5.8 billion in its two Oakmark funds, separate accounts and other funds - could fetch $140 million to $160 million.
After receiving four unsolicited inquiries in the past nine months, Harris hired investment banker Goldman Sachs & Co. last November to advise the firm.
"We are going to explore some of the opportunities that are available to us," said Victor Morgenstern, Harris president.
Sources say two of the inquiries came from Chicago firms.
One is thought to be First Chicago Corp., which wants to expand its investment management business. Another potential suitor is municipal bond underwriter and fund manager John Nuveen Co., which has been pinched by the continuing weak bond market. Minnesota insurer St. Paul Cos. holds 75% of Nuveen's stock.
Mr. Morgenstern expects Harris to reach a decision over the next few weeks. But emphasizes there is no pressure to act quickly.
"If it doesn't make sense, we don't have to do anything. There is no need for capital or for anybody to change their interest in the firm."
Whatever the firm does, the money managers running it intend to stay on, Mr. Morgenstern said.
The flurry of activity comes amid rapid consolidation in the money management world. Brinson Partners Inc. sold for $750 million to Swiss Bank Corp. last year.
Mr. Morgenstern said Harris wants to find a partner - whether through a sale or strategic joint venture - that could help it offer more retirement investment products, such as those serving the fast-growing 401(k) and variable-annuity market.
Another reason for the sale: Some of Harris' retired founding partners hold a large ownership interest in the firm and would like to diversify. Some younger managers, who are now increasingly involved in running the firm, also have been frustrated by the lack of a secondary market for their restricted class B shares.
"The fit would be there with so many (firms)," said Joe Mansueto, president of Morningstar Inc. and a former Harris executive. "Here is an opportunity to expand on what they're doing and build a powerhouse."
