CHICAGO - Performance Analytics Inc. will be sold and its name changed, effective Oct. 1.
William G. Lowery, who was executive vice president and senior consultant, bought the firm from Robert P. Moseson, president and a co-founder.
Mr. Lowery said he is considering the addition of two consultants in investments and client servicing at the firm, which will be renamed Lowery Asset Consulting LLC. He said he might retain an executive recruiting firm, though he hasn't made a decision.
He said he asked several key professionals at Performance Analytics to join him. He expects their decision by the end of the month. He declined to name them. Performance Analytics has eight professionals and 14 staffers in all.
"I'm sure there will be some changes in the people," said Mr. Moseson, who said he has no role in those decisions.
Mr. Lowery, who will be chief executive officer of the new firm, and Mr. Moseson declined to discuss terms of the deal, which was arranged in late August. Mr. Lowery said he will be sole owner, financing the transaction out of his own pocket.
Mr. Moseson said the sale was the result of his and Mr. Lowery's concern for succession and continuity of the firm after Mr. Moseson's eventual retirement.
"Bill was concerned about the success of the firm and his future with the company," Mr. Moseson said. "Our interest was to minimize any disruption to clients."
Mr. Moseson said he will retire with the change in ownership but continue to work at the firm under a five-year contract, mainly involved with computer systems and databases. Mr. Lowery hasn't worked out new titles yet, he said.
"No other bids were sought," Mr. Moseson said of the sale. "Bill's offer was reasonable."
Industry analysts couldn't be reached about the possible price of the deal.
Mr. Lowery has been with the firm since its founding in 1986, working also in part as national sales director. He was not a co-owner.
Mr. Lowery said he is seeking to retain as many of Performance Analytics' 25 clients as he can. He declined to name the clients, which are mostly pension funds, endowments and foundations.
"The overall reaction (to the sale of the firm) has been very favorable," Mr. Lowery said. "It's premature to say if clients will stay. I'm in a period now of getting letters of engagement" from them.
Except for what he called a "de minimus" interest that had been owned by Sheila M. McDermott, an administrator who has been with the firm since its founding, Mr. Moseson has been sole owner since Jan. 1. That's when Leslie I. Golembo, the other co-founder, resigned and sold his 50% ownership to Mr. Moseson, according to Mr. Moseson.
Mr. Golembo, who was chief executive officer, and Performance Analytics settled a disciplinary action by the SEC in June concerning an illegal kickback agreement with a union pension fund client.
Under the settlement of what is formally called an SEC administrative proceeding, Performance Analytics was ordered to pay a $75,000 penalty and Mr. Golembo, $50,000. The order barred him from association with any investment adviser for three years.
The firm and Mr. Golembo didn't admit or deny the charges.
The pension fund wasn't identified in the case. Mr. Moseson declined to name it.
An SEC administrative proceeding in 2001 against Duff & Phelps Investment Management Co., Chicago, which was involved in a related SEC administrative proceeding, named the fund as that of Local 710 of the International Brotherhood of Teamsters, Chicago.
Mr. Moseson said the pension fund involved hasn't been a client for a couple of years or so.
Mr. Golembo couldn't be reached for comment.
Mr. Moseson said his sale of Performance Analytics had nothing to do with the SEC action. He said he had no knowledge of the activity cited in the case.
"Performance Analytics was involved because we were the employer of Les Golembo," Mr. Moseson said. "You can't say the company didn't know if an owner (Mr. Golembo) knew, irrespective if other people in the company knew."
"I had nothing to do with the administrative action," said Mr. Moseson, who isn't named in it. "It didn't hurt the firm financially. Clients seem to understand it was a segregated issue."
He said he isn't aware of the loss of any other clients because of the action.
Mr. Moseson said Mr. Golembo decided to resign because "for the last two years (he) had wanted to see his role diminished" after 30 years in the industry.
In March, Horace J. Schwartz, chief financial officer, who had been with the firm since its founding, retired. David J. Craglione, who was hired at the beginning of the year, replaced him.
Mr. Moseson said he will retain sole ownership of Spectrum Advisory Corp., which sold investment analytics to Performance Analytics to use in asset allocation and other strategic decisions.
Mr. Lowery said "none of my clients used Spectrum," and he doesn't plan to buy it for the new firm.
Spectrum also markets securities valuation model software to investment managers.
Mr. Moseson was an early proponent of the use of computers in investment consulting and identifying value and growth equity styles, including shifting cash flows into and out of the styles as one favored the other.