DAYTON, Ohio - Dennis Dean literally was called in from the field to take over his family's investment management firm.
Succession issues at Dean Investment Associates Inc. became pressing late last year and early this year, as wrap program consultants pulled about $750 million from the firm, apparently concerned by a possible sale as its leaders retired. President Robert Dean retired in September at age 66. His brother, Chairman and company founder Chauncey H. Dean, 77, retired Jan. 31, after persuading his son Dennis, 49, to come back to the company as chairman and chief executive officer.
Dennis Dean, who left the family business in 1994 and since has been raising dairy goats, said the firm "was really a case of entrepreneurial spirit for my dad. He founded this firm and it was like his baby."
Since the return of the prodigal son, assets at the value equity manager have stabilized at $2 billion, roughly half of which is managed for institutional investors. Outside the wrap program, no clients have defected, Dennis Dean said. In fact, a number of the wrap program clients are coming back without their brokers to set up independent accounts with Dean Investment, which has catered to high-net-worth individuals since its inception 27 years ago.
"I am really not sure why the wrap consultants pulled their clients out when they did, but I can tell you that they try to run your company for you," said Dennis Dean. Dean Investment managed a total of $750 million in wrap accounts for Ohio offices of Merrill Lynch & Co., Salomon Smith Barney Inc. and A.G. Edwards Inc.
The firm lost nine of its 79 staffers last year when Chauncey Dean was considering selling the firm. To start his own succession planning, Dennis Dean plans to introduce an employee ownership structure this year.
John C. Riazzi, then head of the portfolio management group, replaced Robert Dean as president and CIO in September, and is now the firm's second-in-command.
Money management was a family tradition for the male side of the Dean family. Dennis worked for his father in earlier money management firms and then for the family firm from its founding.
But in 1994, he left his post as president of Dean Investment "to pursue other interests." With no agricultural experience, Dennis Dean became the co-proprietor of Caprine Estates near Belbrook, Ohio. His wife Patty's hobby - raising champion dairy goats - became a new family business that year.
The first few goats became a herd whose milk production was prodigious, and Caprine Estates slowly grew into the largest Grade A goat dairy in the United States, said Mr. Dean. The 1,000-goat dairy, with on-site cheese production and bottling plants, employs 25 people and produces goat milk and many varieties of fine goat cheeses marketed in the Midwest. In fact, Ohio Gov. Bob Taft visited Caprine Estates last year during Ohio Agriculture Days and held up the farm as an example of modern, niche family farming, with production of the raw material and the finished product all happening right on the farm.