ivant Star; Mercedes M. Cardona
Two consulting firms - The Hannah Group and the Capital Resources unit of SEI Corp. - are being sold.
Advest Inc., Hartford, Conn., purchased The Hannah Group, Boston, a consultant to 35 mostly smaller pension funds. Terms were not disclosed.
SEI Corp., Wayne, Pa., agreed to sell its Chicago-based Capital Resources unit to Alexander & Alexander Consulting Group, New York, for a price close to $8 million, according to sources close to the company.
In the Hannah deal, Advest acquired Hannah and formed Hannah Consulting Group as a wholly owned subsidiary. John Hannah, who had been chairman and chief executive officer of Hannah Group, is president and co-chair of the Hannah Consulting Group.
"We maintain total independence and all of our people," Mr. Hannah said. "We just got a bigger brother."
Advest, mainly a retail securities firm, has a few public fund and Taft-Hartley consulting clients, but most of its clients are individual investors.
SEI, meanwhile, put Capital Resources in play last year, claiming concerns over conflicts of interest with SEI's asset management divisions and changes in the firm's strategic direction. SEI has been concentrating more heavily on asset management and mutual fund management in recent years.
While the sale process was under way, several large clients terminated SEI as consultant, including the Florida State Board of Investment, the Oklahoma Public Employees' Retirement System and Boston City Retirement System.
SEI Corp. went back to the drawing board in March after an agreement with Rochdale Corp., a New York brokerage firm, fell apart at the last minute.
Then, SEI announced it would separate Capital Resources into an independent entity while trying to find a new buyer. The consulting unit, now headquartered in Chicago and headed by John Angley, has been concentrating on rebuilding its client base and recruiting personnel lured away by other firms during the period of the sale attempt.
Mr. Angley said he expects the unit's net client count to be up by year end. SEI Corp. President Hank Greer also noted he expects revenues for the unit to be up for the year.
Alexander had been one of at least three firms rumored to be bidding for the unit; the others were Boston Institutional Advisors and Lynch, Jones & Ryan.
In the Hannah deal, Dan Mullane, senior vice president of the New England division of Advest Inc., said Hannah has continued to grow despite some recent staff defections and loss of clients.
"First we look at character. We found John to be professional with a great deal of character. In the face of adversity - some turnover of personnel and several accounts did not renew (the firm) - they've continued to bring in other new business."
Hannah has had its share of troubles recently.
Dick Zaccaro, senior consultant, left to join H.C. Wainwright & Co., where he will try to build the investment bank's consulting practice. Hannah has also lost some accounts, including the $160 Worcester (Mass.) City Retirement System.
Mr. Mullane said Hannah has been bogged down with the challenge of completing quarterly client reports, which diverted attention from its core business.
Client reporting "involves significant resources and technology for a small firm. The focus was on that reporting function. Really, they're in the business of relationships. Our investment management department and back office will enable the reporting to get done in a timely and professional way.
"It will free Hannah Consulting to interact with clients and monitor performance of the funds. That solves a major problem they faced," Mr. Mullane said.