Hennessy Advisors has entered into a definitive agreement with Manning & Napier Group and Rainier Investment Management to acquire the assets associated with the management of three Rainier Funds, which includes the Rainier Mid Cap Equity Fund, the Rainier Small/Mid Cap Equity Fund, and the Rainier Large Cap Equity Fund.
The Rainier U.S. Funds currently have assets of approximately $565 million. The transaction is expected to be completed in the third quarter of 2017.
Upon completion of the transaction, the assets related to the Rainier Mid Cap Equity Fund and the Rainier Small/Mid Cap Equity Fund will merge into the Hennessy Cornerstone Mid Cap 30 Fund and the assets related to the Rainier Large Cap Fund will merge into the Hennessy Cornerstone Large Growth Fund.
The shareholders of the Rainier U.S. Funds will become shareholders of the Hennessy Funds. Hennessy Advisors, Inc. is the investment manager of the Hennessy Cornerstone Mid Cap 30 Fund and the Hennessy Cornerstone Large Growth Fund.
The transaction is subject to customary closing conditions, including the approval of the Hennessy Funds' Board of Trustees, the Rainier Funds' Board of Trustees and the Rainier U.S. Funds' shareholders.
The transaction has been structured with the intention that it qualify, for federal income tax purposes, as a tax-free reorganization under the Internal Revenue Code of 1986, as amended. Therefore, shareholders of the Rainier U.S. Funds should not recognize any gain or loss for federal income tax purposes as a result of the transaction.
Michael Emery, Senior Portfolio Manager of Rainier commented, "Neil Hennessy and the team at Hennessy Advisors consistently demonstrate a commitment to the mutual fund business and to their shareholders. All of us at Rainier are confident that our shareholders will receive both solid portfolio management and excellent service."
Neil Hennessy, Chairman, CEO and President of Hennessy Advisors, Inc. added, "At Hennessy, we put our shareholders first while delivering strong investment management, quality customer service and a high standard of business ethics. We are proud of our track record in each of these areas. We are committed to a smooth transition for the Rainier Funds shareholders and we look forward to welcoming them into the Hennessy family."