CALAMOS ASSET MANAGEMENT INC CLMS W
January 25, 2013 - 3:25am EST by
alex981
2013 2014
Price: 9.95 EPS $0.79 $0.66
Shares Out. (in M): 20 P/E 12.6x 15.1x
Market Cap (in M): 203 P/FCF 12.6x 15.1x
Net Debt (in M): -175 EBIT 27 22
TEV: 28 TEV/EBIT 1.0x 1.2x

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  • Asset Management
  • Sum Of The Parts (SOTP)
 

Description

Calamos is an equity and convertible bond asset manager with $30 billion AUM and $120mm in 2012 operating profit.  At the current market price, the asset management company is trading at an EV/EBIT of 1x. 

The main issue with the stock is investor skepticism/frustration as to when the significant excess cash and investments on the balance sheet will be returned to shareholders (if ever). (See finn’s writeup and the associated comments from a year and a half ago). Currently, cash and investments on the balance sheet add up to $8.60 per share, versus a current share price of $9.95. At an EV/EBIT of 8x, the asset management company is worth about $8.50 per share, which when added to the value of cash and investments on the balance sheet gives a target price of $17 on the stock.

Since the implied value of the operating business is almost zero at the current price, I will focus the writeup on why the skepticism on the cash is overdone. While I believe there likely won’t be a near term (say, in the next year or two) resolution, the stock pays a healthy dividend (4.5% yield) while you wait, and there will be a resolution if the asset manager continues to perform acceptably.

History and Corporate Structure

Calamos has been around since the early 70s, specializing in convertible debt, but really turned the corner in the early 00s when their big equity funds (Calamos Growth and Calamos Growth & Income) were outperforming. The firm went public in November 2004.

When the firm went public, it did so by selling a 23% stake in the LLC that controlled the asset manager to a newly formed C Corp (subsequently referred to here as CAM), which sold shares to the public. Doing preserved the tax-free status for Calamos family, who continued to own the other 77% of the LLC. It also created a $120 million tax asset for the new shareholders of CAM, earnable over 15 years. (The tax asset comes through something called a section 754 election, which allows an asset step-up in scenarios such as these; in my opinion this seems like a ridiculous loophole but the IRS has allowed it with asset managers). The structure was “unitized” – for every share of common stock outstanding, CAM owned one unit of the LLC. There were 23 million shares of stock, backed by 23 million units of the LLC plus the tax asset (the family owned the other 77 million LLC units).

By law, the tax asset can only accrue to shareholders of CAM, setting up a situation where CAM consistently has significant assets outside its holding in the LLC – the remainder of the tax asset, plus some accumulated cash (from the monetization of the tax asset, plus the difference between LLC distributions received and dividends paid). These are referred to in filings and in this writeup as Other Assets, and the present value of these assets were about $100 million, or $4.89 per share as of 9/30/12.

To make the corporate structure work, there are some unusual clauses. One is that RSUs and options issued to employees dilute the whole structure, not just CAM. When an RSU is exercised, CAM gets LLC units for free to offset the dilution. Repurchases work the opposite way – the LLC buys LLC units back from CAM, and CAM uses the cash from the sale to buy back CAM shares in the open market. The disclosure isn’t complete here, but as far as I can tell CAM has been getting credit (or charged) for its Other Assets when these transactions take place. This kept the structure “unitized” – for every CAM share that was issued or repurchased, an LLC unit was issued or repurchased.

The company was growing nicely through 2007. In 2007, the LLC borrowed $400 million, mostly seed new funds and partnerships as well as buy back some stock. In 2008, the market started to turn, and the LLC had to sell investments at a loss to raise cash to pay down and restructure the debt, since it was at risk of blowing the covenants. As part of the process to raise cash, the LLC sold units to CAM and to the Calamos family for cash and investments, “de-unitizing” the structure. Today, CAM owns more LLC units than it has shares outstanding thanks to this transaction.

Needless to say, this was probably something of a traumatic experience for management, and they got much more conservative with how the balance sheet was managed. They began hedging their investments and accumulating cash on the balance sheet. They also cut the dividend.  This was all much to the annoyance of shareholders, who have seen the share price languish even as the market (and the company) has recovered. Alpine Capital Research, a 6% shareholder, last year became vocal about demanding that cash be returned to shareholders. Today, even though dividend has been fully restored, but cash has been accumulating at the CAM level, reaching $64.7 million ($3.17/share) as of 9/30/12.

Why this will turn around (possibly soon):

The worry in cases like these, where management controls the company, is that management will somehow screw public shareholders. I would argue this is unlikely here because:

-       If you look at the history carefully, management does have a track record of returning cash to shareholders. They did repurchases in 2007 and 2008 (maybe not the best timing, but still) and have maintained a high payout ratio. Also, in 2008, they turned the cash at the CAM level into more LLC units at fair value (under some duress, but still).

-       In 2009, they voluntarily codified the value of the Other Assets by amending the company’s Certificate of Incorporation so that any exchange of LLC units into common stock would be required to account for them. (Although, in any case, the family would be unlikely to convert LLC units into shares anytime soon anyway because doing so would dramatically hike their tax bill by subjecting their ownership to corporate income tax).

-       One thing to note is that all of the employees, including non-family executive management and the directors, only own shares, or RSUs and options that convert into shares. Screwing over shareholders to benefit the family would not be good for employee morale.

-       The family owns 78% of a company that’s probably worth $1 billion or more. They don’t have much to gain by going after the shareholders of that own the other 22%. At the same time, the CLMS share price is a public indicator of how the company is doing, so they have some incentive to get it up. Usually (but not always!) when you see an abusive management, it’s when management has a minority economic interest and thus more incentive for abuse.

-       There’s also no legal way for them to get at the assets held at the CAM level without giving fair value from the LLC back to CAM (as they did in 2008, when they sold LLC units to CAM). Thus, they don’t have a ton to gain by accumulating CAM cash when the stock is trading at a level this low, the family would massively dilute themselves by downstreaming cash to the LLC.

The big issue here is timing. Now would be a great time for a repurchase or a self-tender, with the stock trading so cheaply. They could do this in a way that benefited both the family and public shareholders (if they used LLC cash and investments) or just public shareholders (if they used CAM cash). I don’t think this can be ruled out – they declined to do a special dividend at the end of 2012 (surprising for a company with excess cash) and the last time they did a repurchase, they gave no indication they would do so beforehand, stating at one point they didn’t want to tip their hand if they were considering one.

On the other hand, management does seem a bit scarred from their 2008 experience. Note below that the LLC itself is still in a net debt position. Also, there is a $46 million chunk of debt due in the middle of 2014. If they were to return cash to shareholders, they would have to liquidate some of their investments, something management is probably loath to do. So, a return of cash to shareholders isn’t exactly a slam dunk right here. However, I think it is likely to happen in the next three years or so if the stock price stays low, as the company pays down debt and accumulates cash. 

   

CAM

 

LLC

 

Consolidated

   

9/30/12

 

9/30/12

 

9/30/12

             

Cash

 

 64,700

 

 53,201

 

 117,901

Tax Asset (discounted @12%)

 

 35,000

 

 -

 

 35,000

Investment Securities

 

 -

 

 344,224

 

 344,224

Partnership Investments

 

 -

 

 36,559

 

 36,559

Total Liquid Assets

 

 99,700

 

 433,984

 

 533,684

             

Debt

 

 -

 

 92,115

 

 92,115

             

Net Liquid Assets

 

 99,700

 

 341,869

 

 441,569 

Valuation of the cash and liquid securities: 

   

CAM

   
   

9/30/12

 

Per Share

         

Cash

 

 64,700

 

3.17

Tax Asset (discounted @12%)

 

 35,000

 

1.72

22.1% stake in LLC Net Liquid Assets

 

 75,553

 

3.71

Total Liquid Assets

 

 175,253

 

8.60

         

Memo: Shares Outstanding

 

20,386

   
         

Market Cap

 

 202,841

 

9.95

EV

 

 27,588

 

1.35

Implied EV of Asset Manager (@22.1%)

 

 124,832

   

One wild card here is the tax asset. It still has 7 years to run (through 2019) but it only has value as long as CAM has $8 million a year of federal taxes to cover.  If LLC profits slip or corporate tax rates are cut, this might be impaired somewhat, though I think a 12% discount rate compensates for the risk (the gross value is $56 million). Also, the value of the LLC investments will go up and down with the market (over half is in equities, the rest is in traditional fixed income and converts), so that’s something to keep an eye on too.

Valuation of the Operating Company 

   

2004

2005

2006

2007

2008

2009

2010

2011

2012E

2013E

                       

Average AUM

 

30,707

39,973

45,680

44,769

37,066

27,359

32,249

35,693

34,392

30,700

Fee Rate (bps)

 

68.6

71.3

72.1

72.7

74.0

73.4

73.9

74.7

75.6

74.9

                       

Fee Revenue

 

210,725

284,951

329,383

325,395

274,174

200,790

238,308

266,553

260,000

230,000

                       

Total Revenue

 

312,147

417,567

485,172

473,477

391,589

281,738

326,039

352,321

330,000

290,000

                       

Operating Income

 

133,470

206,094

231,028

173,093

159,097

98,058

126,501

140,349

120,000

100,000

Margin

 

42.8%

49.4%

47.6%

36.6%

40.6%

34.8%

38.8%

39.8%

36.4%

34.5% 

I think the operating company is worth maybe 8x pretax income, or about $800 million. CAM’s 22.1% stake would be worth about $175 million, or $8.50 per share given 20 million shares outstanding. It’s not the highest multiple in the world, but I think there is some risk that assets under management continue to decline, as performance has been weak. 

The biggest open-end fund, Calamos Growth, accounts for $5.8 billion of AUM, or 19% of total AUM. Thanks to recent underperformance, it is now a 1 star rated fund. It accounted for a lot of the AUM growth in the earlier years; at its peak it was a 5 star fund and had $17 billion AUM. (Which goes to show how useful Morningstar’s rating system is). The second biggest fund is Calamos Growth & Income, at $4 billion AUM (13% of the total), and is now 2 star rated. Of course ratings can change quickly based on future performance.

The remainder of AUM is more secure, including open-end funds that aren’t doing that badly ($7 billion), closed-end funds ($6 billion), institutional accounts ($6 billion), and managed accounts ($2 billion).

One interesting thing to note here is that they just acqui-hired a co-CIO from outside the family, Gary Black, who in the past has led GSAM and Janus. This might help a bit in landing more institutional money.

Risks

-       Management refuses to let go of the cash

-       Management does something to screw over public shareholders

-       Declining equity markets

-       Continued underperformance of managed funds

I do not hold a position of employment, directorship, or consultancy with the issuer.
I and/or others I advise hold a material investment in the issuer's securities.

Catalyst

- Repurchase, self-tender, or special dividend
    sort by   Expand   New

    Description

    Calamos is an equity and convertible bond asset manager with $30 billion AUM and $120mm in 2012 operating profit.  At the current market price, the asset management company is trading at an EV/EBIT of 1x. 

    The main issue with the stock is investor skepticism/frustration as to when the significant excess cash and investments on the balance sheet will be returned to shareholders (if ever). (See finn’s writeup and the associated comments from a year and a half ago). Currently, cash and investments on the balance sheet add up to $8.60 per share, versus a current share price of $9.95. At an EV/EBIT of 8x, the asset management company is worth about $8.50 per share, which when added to the value of cash and investments on the balance sheet gives a target price of $17 on the stock.

    Since the implied value of the operating business is almost zero at the current price, I will focus the writeup on why the skepticism on the cash is overdone. While I believe there likely won’t be a near term (say, in the next year or two) resolution, the stock pays a healthy dividend (4.5% yield) while you wait, and there will be a resolution if the asset manager continues to perform acceptably.

    History and Corporate Structure

    Calamos has been around since the early 70s, specializing in convertible debt, but really turned the corner in the early 00s when their big equity funds (Calamos Growth and Calamos Growth & Income) were outperforming. The firm went public in November 2004.

    When the firm went public, it did so by selling a 23% stake in the LLC that controlled the asset manager to a newly formed C Corp (subsequently referred to here as CAM), which sold shares to the public. Doing preserved the tax-free status for Calamos family, who continued to own the other 77% of the LLC. It also created a $120 million tax asset for the new shareholders of CAM, earnable over 15 years. (The tax asset comes through something called a section 754 election, which allows an asset step-up in scenarios such as these; in my opinion this seems like a ridiculous loophole but the IRS has allowed it with asset managers). The structure was “unitized” – for every share of common stock outstanding, CAM owned one unit of the LLC. There were 23 million shares of stock, backed by 23 million units of the LLC plus the tax asset (the family owned the other 77 million LLC units).

    By law, the tax asset can only accrue to shareholders of CAM, setting up a situation where CAM consistently has significant assets outside its holding in the LLC – the remainder of the tax asset, plus some accumulated cash (from the monetization of the tax asset, plus the difference between LLC distributions received and dividends paid). These are referred to in filings and in this writeup as Other Assets, and the present value of these assets were about $100 million, or $4.89 per share as of 9/30/12.

    To make the corporate structure work, there are some unusual clauses. One is that RSUs and options issued to employees dilute the whole structure, not just CAM. When an RSU is exercised, CAM gets LLC units for free to offset the dilution. Repurchases work the opposite way – the LLC buys LLC units back from CAM, and CAM uses the cash from the sale to buy back CAM shares in the open market. The disclosure isn’t complete here, but as far as I can tell CAM has been getting credit (or charged) for its Other Assets when these transactions take place. This kept the structure “unitized” – for every CAM share that was issued or repurchased, an LLC unit was issued or repurchased.

    The company was growing nicely through 2007. In 2007, the LLC borrowed $400 million, mostly seed new funds and partnerships as well as buy back some stock. In 2008, the market started to turn, and the LLC had to sell investments at a loss to raise cash to pay down and restructure the debt, since it was at risk of blowing the covenants. As part of the process to raise cash, the LLC sold units to CAM and to the Calamos family for cash and investments, “de-unitizing” the structure. Today, CAM owns more LLC units than it has shares outstanding thanks to this transaction.

    Needless to say, this was probably something of a traumatic experience for management, and they got much more conservative with how the balance sheet was managed. They began hedging their investments and accumulating cash on the balance sheet. They also cut the dividend.  This was all much to the annoyance of shareholders, who have seen the share price languish even as the market (and the company) has recovered. Alpine Capital Research, a 6% shareholder, last year became vocal about demanding that cash be returned to shareholders. Today, even though dividend has been fully restored, but cash has been accumulating at the CAM level, reaching $64.7 million ($3.17/share) as of 9/30/12.

    Why this will turn around (possibly soon):

    The worry in cases like these, where management controls the company, is that management will somehow screw public shareholders. I would argue this is unlikely here because:

    -       If you look at the history carefully, management does have a track record of returning cash to shareholders. They did repurchases in 2007 and 2008 (maybe not the best timing, but still) and have maintained a high payout ratio. Also, in 2008, they turned the cash at the CAM level into more LLC units at fair value (under some duress, but still).

    -       In 2009, they voluntarily codified the value of the Other Assets by amending the company’s Certificate of Incorporation so that any exchange of LLC units into common stock would be required to account for them. (Although, in any case, the family would be unlikely to convert LLC units into shares anytime soon anyway because doing so would dramatically hike their tax bill by subjecting their ownership to corporate income tax).

    -       One thing to note is that all of the employees, including non-family executive management and the directors, only own shares, or RSUs and options that convert into shares. Screwing over shareholders to benefit the family would not be good for employee morale.

    -       The family owns 78% of a company that’s probably worth $1 billion or more. They don’t have much to gain by going after the shareholders of that own the other 22%. At the same time, the CLMS share price is a public indicator of how the company is doing, so they have some incentive to get it up. Usually (but not always!) when you see an abusive management, it’s when management has a minority economic interest and thus more incentive for abuse.

    -       There’s also no legal way for them to get at the assets held at the CAM level without giving fair value from the LLC back to CAM (as they did in 2008, when they sold LLC units to CAM). Thus, they don’t have a ton to gain by accumulating CAM cash when the stock is trading at a level this low, the family would massively dilute themselves by downstreaming cash to the LLC.

    The big issue here is timing. Now would be a great time for a repurchase or a self-tender, with the stock trading so cheaply. They could do this in a way that benefited both the family and public shareholders (if they used LLC cash and investments) or just public shareholders (if they used CAM cash). I don’t think this can be ruled out – they declined to do a special dividend at the end of 2012 (surprising for a company with excess cash) and the last time they did a repurchase, they gave no indication they would do so beforehand, stating at one point they didn’t want to tip their hand if they were considering one.

    On the other hand, management does seem a bit scarred from their 2008 experience. Note below that the LLC itself is still in a net debt position. Also, there is a $46 million chunk of debt due in the middle of 2014. If they were to return cash to shareholders, they would have to liquidate some of their investments, something management is probably loath to do. So, a return of cash to shareholders isn’t exactly a slam dunk right here. However, I think it is likely to happen in the next three years or so if the stock price stays low, as the company pays down debt and accumulates cash. 

       

    CAM

     

    LLC

     

    Consolidated

       

    9/30/12

     

    9/30/12

     

    9/30/12

                 

    Cash

     

     64,700

     

     53,201

     

     117,901

    Tax Asset (discounted @12%)

     

     35,000

     

     -

     

     35,000

    Investment Securities

     

     -

     

     344,224

     

     344,224

    Partnership Investments

     

     -

     

     36,559

     

     36,559

    Total Liquid Assets

     

     99,700

     

     433,984

     

     533,684

                 

    Debt

     

     -

     

     92,115

     

     92,115

                 

    Net Liquid Assets

     

     99,700

     

     341,869

     

     441,569 

    Valuation of the cash and liquid securities: 

       

    CAM

       
       

    9/30/12

     

    Per Share

             

    Cash

     

     64,700

     

    3.17

    Tax Asset (discounted @12%)

     

     35,000

     

    1.72

    22.1% stake in LLC Net Liquid Assets

     

     75,553

     

    3.71

    Total Liquid Assets

     

     175,253

     

    8.60

             

    Memo: Shares Outstanding

     

    20,386

       
             

    Market Cap

     

     202,841

     

    9.95

    EV

     

     27,588

     

    1.35

    Implied EV of Asset Manager (@22.1%)

     

     124,832

       

    One wild card here is the tax asset. It still has 7 years to run (through 2019) but it only has value as long as CAM has $8 million a year of federal taxes to cover.  If LLC profits slip or corporate tax rates are cut, this might be impaired somewhat, though I think a 12% discount rate compensates for the risk (the gross value is $56 million). Also, the value of the LLC investments will go up and down with the market (over half is in equities, the rest is in traditional fixed income and converts), so that’s something to keep an eye on too.

    Valuation of the Operating Company 

       

    2004

    2005

    2006

    2007

    2008

    2009

    2010

    2011

    2012E

    2013E

                           

    Average AUM

     

    30,707

    39,973

    45,680

    44,769

    37,066

    27,359

    32,249

    35,693

    34,392

    30,700

    Fee Rate (bps)

     

    68.6

    71.3

    72.1

    72.7

    74.0

    73.4

    73.9

    74.7

    75.6

    74.9

                           

    Fee Revenue

     

    210,725

    284,951

    329,383

    325,395

    274,174

    200,790

    238,308

    266,553

    260,000

    230,000

                           

    Total Revenue

     

    312,147

    417,567

    485,172

    473,477

    391,589

    281,738

    326,039

    352,321

    330,000

    290,000

                           

    Operating Income

     

    133,470

    206,094

    231,028

    173,093

    159,097

    98,058

    126,501

    140,349

    120,000

    100,000

    Margin

     

    42.8%

    49.4%

    47.6%

    36.6%

    40.6%

    34.8%

    38.8%

    39.8%

    36.4%

    34.5% 

    I think the operating company is worth maybe 8x pretax income, or about $800 million. CAM’s 22.1% stake would be worth about $175 million, or $8.50 per share given 20 million shares outstanding. It’s not the highest multiple in the world, but I think there is some risk that assets under management continue to decline, as performance has been weak. 

    The biggest open-end fund, Calamos Growth, accounts for $5.8 billion of AUM, or 19% of total AUM. Thanks to recent underperformance, it is now a 1 star rated fund. It accounted for a lot of the AUM growth in the earlier years; at its peak it was a 5 star fund and had $17 billion AUM. (Which goes to show how useful Morningstar’s rating system is). The second biggest fund is Calamos Growth & Income, at $4 billion AUM (13% of the total), and is now 2 star rated. Of course ratings can change quickly based on future performance.

    The remainder of AUM is more secure, including open-end funds that aren’t doing that badly ($7 billion), closed-end funds ($6 billion), institutional accounts ($6 billion), and managed accounts ($2 billion).

    One interesting thing to note here is that they just acqui-hired a co-CIO from outside the family, Gary Black, who in the past has led GSAM and Janus. This might help a bit in landing more institutional money.

    Risks

    -       Management refuses to let go of the cash

    -       Management does something to screw over public shareholders

    -       Declining equity markets

    -       Continued underperformance of managed funds

    I do not hold a position of employment, directorship, or consultancy with the issuer.
    I and/or others I advise hold a material investment in the issuer's securities.

    Catalyst

    - Repurchase, self-tender, or special dividend

    Messages


    Subjectfamily incentives/morningstar 1
    Entry01/28/2013 01:25 PM
    Memberrr543
    What are the ages of the major family llc holders?  they may well have important incentives to keep the stock price down, so they can base an estate tax valuation on the depressed price. 
    Apropos Morningstar ratings, my impression is that they are based on 3/5 year perfomance stats and are not that likely to rebound in the near term.  Result might well be accelerated redemptions and no inflows.
    Comments?

    SubjectRE: RE: Expropriation of CAM assets?
    Entry02/01/2013 03:34 PM
    Membermpk391
    alex,
    I agree with you that mgmt is unlikely to badly screw shareholders here, but alpine's concern is entirely valid: the current articles of incorporation absolutely do permit the family to exchange LLC interests for shares without giving consideration for the Other Assets.  this is true because (as noted in the 2009 amendments) the independent members of the board could simply choose to value the Other Assets at zero when calculating how many shares to be given in such an exchange.
     
    if this weren't the case, there would be no need to include the scenario analysis (full consideration vs no consideration) in every 10Q and 10K.
     
    anyone here know if the board could be sued for breach of loyalty if they valued the Other Assets at zero in an exchange, even though this is permitted by the articles of incorporation?
     
    also, I'm not sure an exchange is the only way to screw shareholders.  management talks a lot about how this excess capital at the c-corp level could provide seed capital for new funds.  this concerns me ... if they take c-corp cash to seed a new fund which later generated fee revenue, would shareholders get 100% of this revenue or just 22.1%?
     
    thanks

    SubjectStock Buyback
    Entry02/14/2013 10:05 AM
    MemberSiren81

    FWIW – I spoke with the company and the buyback is intended to offset dilution on all RSUs currently outstanding (not just what will be issued in the future). Since there are currently about 2.6m of these outstanding then the 3m repurchase number makes sense. This is a subtle, but important, distinction.


    SubjectAlso, I gave this an “8”
    Entry02/14/2013 10:16 AM
    MemberSiren81

    I think this is a phenomenal idea. By my calculations, you’re buying a decent business at about 1.5x EBIT… yes, its true that the capital allocation is perhaps not ideal, but its not the worst either - they pay a huge dividend and it looks like they’re starting to buy back shares. The Alpine Capital stuff about the valuation of the other assets or other ways the family could screw shareholders is nonsense. If that’s a deal-breaker then you’re basically saying “I’m not going to buy this company at 1.5x EBIT b/c there’s a chance I could get screwed by someone who has shown no intention of doing so, does not have the incentives to do so, and does not have any legal protections if they did”.


    SubjectRE: RE: RE: RE: RE: Sell-side really doesn't know?
    Entry02/14/2013 01:20 PM
    Memberbroncos727
    I think they probably are eager to cover the stock because it helps their trading desk get some orders from the Calamos funds.  Good write up. 

    SubjectRE: Anyone else getting concerned here?
    Entry04/25/2013 12:04 PM
    Membermpk391
    yes, I'll admit to being concerned.  and disappointed, given 1Q13 was the first full quarter of performance with the new CIO (Mr. Black) and the supposed re-orientation of the funds towards a less conservative positioning.
     
    by my math, the excess cash and investments were $7.16/share at ye12.  So assuming no change in that number, the EV is $4.42 for the 22.1% stake in CAM.  Assuming an AUM loss like you described and no cost cuts, I get an EV/EBIT closer to 6X.  keep in mind that the effective tax rate will continue to be tiny for the next 6 years.  and they'll probably continue to offset some of that AUM loss by launching new funds.
     
    but yes, it's concerning.
     
     

    SubjectRE: RE: Anyone else getting concerned here?
    Entry04/25/2013 02:38 PM
    Membermpk391
    alex-  we're basically on the same page.  I wasn't including the tax asset in my excess capital calculation.  personally I like thinking about this as: stock price less (c-corp cash + stake in CAM cash & invesments)/share = EV, then comparing that EV to mgmt's proforma EPS, which has been well over $/share each year for some time now.
     
    at $11.50 or so, I think the AUM loss concerns are fully priced in (but I've been wrong many a time!)  On the upside I'm hoping for a high-teens share price.

    SubjectRE: RE: RE: CAM cash
    Entry08/24/2013 09:17 PM
    Memberthesituation
    sorry it got cut off midway. So I would generally agree, the mgmt fee is less than 5c a share, and they will probably earn more than that in investment returns. The family's attitude towards the other assets is certainly frustrating but hey that is why the opportunity exists. Thanks so much for the response and the great idea!
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