When the principals of Robertson Stephens Investment Management Co. in San Francisco bought back the firm from Bank of America in February, RS portfolio manager Ron Elijah wouldn't go along.
His instinct was drawing him in another direction.
"When we were being sold (before the buyback), we were interviewed by dozens of potential buyers. I asked them why they wanted us," he said. Shoppers were interested, in part, in the growth funds managed by Mr. Elijah, the $703 million RS Value + Growth Fund and the $161 million RS Information Age Fund, which is co-managed by Rod Berry.
"I began to believe that if I got my team out there, maybe someone would buy a part of us," Mr. Elijah said. A window had opened and "there was a brief moment that I could get this done."
Slowly the pieces fell into place and, after amicable discussions with RS leaders Randy Hect and Paul Stephens, Mr. Elijah and his team launched Elijah Asset Management on March 1. The new firm was promptly hired as subadviser for the two RS funds.
The new firm benefits from the fee revenue on more than $800 million in total assets under management, and RS avoids the loss of a management team.
Only a fraction of the assets in the RS subadvisory relationship are institutional, but the business will support Elijah while it pursues the institutional separate account business, according to Mike Dunn, Elijah's chief operating officer.
Mr. Elijah said: "I had a long history with these guys (Messrs. Hect and Stephens). And I have a significant portion of the assets under my control, which gave me the strength. But it was combined with the long relationships, which counted for a lot," he said.
"Over the years, I have always hoped that at some point I would be the leading guy to start a firm, but with kids and financial obligations, it was hard to hold onto that dream. I was always impressed when I'd see managers leave and start firms with no assets and work very hard for three to four years. I just got lucky."
