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October 13, 1997 - Matrix Global Investments Acquires Carret and Company

NEW YORK, October 13, 1997 -- Matrix Global Investments, an operating company in the investment management business that was recently capitalized by New York merchant bank Castle Harlan, Inc., announced today the acquisition of Carret and Company, a money management firm with nearly $1 billion under management. The purchase price was not disclosed.

 

Carret and Company's predecessor firm was founded 70 years ago by Philip L. Carret, a pioneer in the concept of value investing and creator of one of the earliest mutual funds, the Pioneer Fund. In 1988, the company was purchased by David J. Olderman, who will remain chairman of Carret after the completion of the Matrix transaction. William H. Webber, Jr., president and also a principal of Carret, will be chief executive officer, a position formerly held by Olderman. Carret, who is about to celebrate his 101st birthday, is no longer active in the business day-to-day, although he still comes to the office several days a week. His granddaughter, Renee C. Carret, is a managing director of the firm.

 

The principals of Carret (rhymes with allay) are retaining a substantial equity position in the company, and other key Carret professionals will also be investors in the firm going forward.

 

"It was important to find partners that not only share our values but also a long-term orientation for Carret," Olderman said. "We know the principals at Matrix and the people at Castle Harlan well, and we have the deepest respect for their records of achievement. They will provide us with the opportunity to grow while continuing to operate independently, and their philosophy of making equity in Carret available to our professionals was very important for Bill and me in our decision to become aligned with Matrix. We know this new partnership marks the beginning of an exciting new chapter for Carret and Company, and we look to the future with great confidence and optimism."

 

Clinton J. Kendrick, Matrix chairman and chief executive officer, noted that Carret and Company, which is based in New York, is the first of a planned series of acquisitions that Matrix will make to create a diversified, global investment management and asset-gathering firm. "Matrix," he said, "aims to invest in independent money management firms with non-overlapping investment styles to create a broadly diversified product line."

 

"Carret has a long-standing reputation for providing high-quality investment management services," Kendrick said, "and a strong, deep team of investment professionals who provide an excellent base for continued growth. We couldn't have picked a better firm with which to launch our venture."

 

Kendrick said that, in addition to investing in money-management firms, Matrix would build a global marketing and sales organization at the parent-company level to distribute worldwide the investment products of its independent partner firms.

 

Carret clients include high net worth individuals, pension and profit sharing plans and not-for-profit foundations, for which it manages equity, fixed income and balanced portfolios. The company follows a value-based equity investment style, which emphasizes established companies with low price/earnings and price/book-value ratios.

 

Alastair Short, president of Matrix, noted that Carret's assets had grown at a rate of approximately 20 percent per year compounded over the past 5 years, even though a substantial portion of clients maintain balanced accounts with the firm and withdraw capital regularly. "This excellent growth record is characteristic of a very professional firm servicing clients effectively and attracting high quality new business," said Short.

 

Castle Harlan announced early last month that it was investing $60 million to capitalize Matrix, on behalf of its third limited partnership, Castle Harlan Partners III, and would hold a majority stake. Kendrick and Short, the Matrix principals, also each hold a substantial equity interest in Matrix.