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Ownership Stability Helps MAI Thrive

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CLEVELAND – December 10, 2007 – by SHAWN A. TURNER Crain's Cleveland Business

When he first received the call in March 2006 from an investment banker who was shopping what was then McCormack Advisors International in Cleveland, former Victory Capital Management CEO, Rick Buoncore, admits he was not terribly interested in acquiring the business. 

"This is a perfect fit for you." he recalled the investment banker as saying.

"Oh, you tell that to everyone." Mr. Buoncore responded.

Mr. Buoncore had left Victory in 2005 to set up his own small investment management company, BC Investment Partners LLC, and wasn't ready to acquire a money management firm that had undergone multiple management changes in a short time span.

McCormack advisors had been sold in 2000 to Merrill Lynch by sports marketing giant IMG, whose founder, Mark H. McCormack, had created the money management affiliate.  Merrill then sold the business back in 2002 to IMG, though it would change hands again when IMG was acquired in November 2004 by an affiliate of private equity firm Forstmann Little & Co.

"This was an organization that was sort of in limbo." Mr. Buoncore said of McCormack Advisors.

But Mr. Buoncore said a closer look revealed McCormack Advisors could benefit from placing more emphasis on its investment management business and from stable ownership.  He also was impressed by the people at McCormack.

So, on February 1st of this year, he assumed control of the firm, which has been renamed MAI Wealth Advisors, LLC.

It turns out that perhaps the investment banked who'd called Mr. Buoncore wasn't wrong.

MAI currently counts billable assets under management of $1.2 billion, a 41% increase from $853.1 million on April 30th of this year, according to July 16 Crain's Cleveland Business list of Northeast Ohio's largest money managers.

The firm employs 55, and several could be added during the next year, though Mr. Buoncore declined to give an exact number of how many hires will be made.  He also declined to disclose the firm's asset level target.

"We were hoping that in the first year or so we would just stabilize the business." Mr. Buoncore said.  "Truth be told, we were expecting some decline."

Mr. Buoncore, Managing Partner of MAI, credits in part the firm's attention to its wealth management business as helping boost its asset levels.  For instance, the firm in January plans to introduce its MAI Strategic Equity Allocation Fund, which will provide investors exposure to several asset classes.

"It's the whole universe." Mr. Buoncore said.  "Domestic and international equities, commodities" and real estate investment trusts.  the firm also offers tax, estate and retirement planning services. 

So far, selling the firm's own clients on its investment management services -- something McCormack Advisors hadn't done -- is paying off, said Martin Christ, a Director at MAI.

"We're still in the elementary stages." Mr. Christ said.  "We've got to catch up on a business almost 35 years old and tell a story that's never really been told."