Investment Management Firm- Windward

 Investment Management Firm- Windward
This report analyzes an investment management firm, Windward. It is a well established registered investment advisor, which has been working as an independent money manager for its clients. The core client base of the firm consists of the high-net-worth individuals and the family offices. Windward Investment Management Company has witnessed a rapid growth in AUM (assets under management) in past 10 years, but now the company is considering a range of future growth opportunities and how to finance those opportunities, including raising external capital. The case focuses on the decision of what opportunities, Windward should consider and on the valuation of the firm if it decides to raise external capital.


For the purpose of deriving a structural analysis, report is divided in 6 chapters. Chapter one is of introductory chapter. This chapter acquaints the reader with the background of the study. Here the statement of problem, aims and objectives of the study and a detailed synopsis of the entire report’s structure has been disclosed. Beginning of the chapter sketches the pertaining business process, client base, situation, working etc at Windward.

In the second section case description is given. Here a detailed picture of the case has been drawn. This chapter gives details regarding the company, company’s management, business process, its evolution, industry etc. This chapter provides ground to the entire study.

Statement of problem backed by the case brief will be defined in this section of the report. All the relevant concepts and theories will also get introduced and discussed here only. Such discussion will be termed as the literature review of the topic. Further a detailed plan for analysis will be carried out along with defining the most appropriate sources of data for the study. Through data analysis in accordance with the proposed plan of analysis, assessment of the current position of the firm will be done and further the prospective strategies for the firm will be derived.

In the fifth section of the report a detailed and integrated analysis of the findings will be done. Through the discussion, recommendations for Windward will be scaled out. On the basis of the recommendations and discussion a plan of action will be proposed with a rigorous discussion on the limitations of the study conducted or the derived results. Further the chapter will end with discussions on the scope of further studies. Sixth chapter will be concerned about the utility of the study for the other players of some other industries. Here, the learning of the entire analysis will be briefed and applied on any other industry unit.

1.Introduction
1.1 Background

This case is about an investment management firm, Windward. It is a well established registered investment advisor, which has been working as an independent money manager for its clients. The core client base of the firm consists of the high-net-worth individuals and the family offices. It is functioning in Manchester with its 38 highly talented employees from different educational backgrounds. Total asset under management i.e. AUM has been $3.6 billion till 2010.

This firm is originated in late 1999 and founded by the sole owner, Steve Cucchiaro. Steve is a MIT graduate in applied mathematics. Further an MBA, which has been done by him from Wharton School, Pennsylvania in 1977. After completion of the MBA, Steve has joined as a financial consultant at Coopers & Lybrand, then Data Resource Inc. He has also worked as the strategic consultant at Massachusetts office of CSP international, Cambridge. Later in 1985, Steve has joined Cox Enterprise and subsequently opened Datext.

Steve Cucchiaro further resigned from the job and started working from a rented office at Manchester. This time again, it was an IT venture, which was offering consultant to ICAD Inc. Steve worked independently till he was assigned the president-ship by the firm. After amalgamation of ICAD and Oracle, he left ICAD and started an S Company, Windward in association with his two friends with a capital of $3 Million in 1994. After five years i.e. in 1999, Windward was placed in the RIA industry with AUM of $ 30 million. From here, the journey of Windward in the RIA industry started.

Basically RIA companies have a duty to perform in the best interest of the client. This duty makes such firms more enduring for the clients and has resulted in the rapid growth in the total AUM and number of players in the industry. As per an estimate, there are about 14,000 to 17,000 RIAs in US. This industry is highly concentrated, as an estimate shows that 90% of the AUM is managed by 20% of the firms. Contrasting with the mutual fund industry, RIAs has to manage many unique portfolios according to the requirement of the clients. Portfolios can be made up of individual scripts, bonds, ETFs or mutual funds etc. Windward is largest user of ETFs among the RIAs.