Jan. 16--Baird Capital Management LLC, an institutional money management firm started by Robert W. Baird & Co. and former Firstar Corp. executives, will close by the end of March -- less than nine months after its start-up.
"Our business plan was predicated, in part, on additional portfolio managers joining the firm during the initial year of operation. For a variety of reasons, these personnel additions will not occur," Michael J. Bills, vice president and director of marketing, wrote in a letter to be sent to consultants and potential clients the firm had been working with.
Without additional money managers, the firm would have had to alter its original business plan and manage money for retail and personal trust accounts, said R. Bart Wear, an equity portfolio manager with the firm.
"We wanted to have a substantial business and attack the institutional client marketplace in a proper way. We didn't want a small firm," he said.
Baird Capital Management opened for business July 1 in offices in the Milwaukee Center. It had an account minimum of $10 million and was organized to pursue high-end institutional clients.
"We've seen this kind of thing happen with new firms where they underestimate the relationship factor in bringing over new accounts," said Robert J. Bukowski, senior consultant at Alpha Investment Consulting Group LLC, a Milwaukee money management consulting firm.
But Bukowski said it's difficult for a new firm to gather assets or convince former clients to switch their accounts to a new firm in just six months.
"It's a year lead time on a lot of pension funds to get them to move their money over," he said.
Wear declined to comment about how much in assets Baird Capital is managing.
Baird Capital also had filed with regulators to start two new no-load stock funds for institutional investors this month. However, the funds have not been started, Wear said.
Baird Capital is 60 percent owned by Robert W. Baird & Co. and 40 percent owned by Summit Partners LLC, which is owned by Bills, equity portfolio managers Wear and Joseph Docter, plus two other officers of Baird Capital: Robert A. Lintereur, a director of the firm and president of Stocks Inc.; and Dana J. Russart, the firm's operations director.
The officers, however, have said previously that they owned a majority of the cash flow from the new firm.
The decision to close the firm was made by Bills, Doctor, Russart and Wear, not by Baird, said G. Frederick Kasten Jr., Baird's president. "We think they're four very talented individuals, and we're sorry it didn't work out," he said.
The dissolution of Baird Capital will not have an impact on Baird Investment Management, Baird's large-company growth stock manager, Kasten said. Baird Investment, which has a minimum investment of $500,000, is headed by Baird managing director Robinson Bosworth III and has offices in Milwaukee and Appleton, Kasten said.
Baird Capital's closing also had nothing to do with its investment performance, which was outstanding, Wear said. Alpha Investment Consulting's Bukowski agreed that the firm had a very good performance in the second half of 1996.
Before starting Baird Capital, Bills was a senior executive vice president at Firstar Corp. responsible for the trust and investment areas, including Firstar Investment Research & Management Co., known as Firmco.
Docter was co-manager of the Portico MicroCap and Portico Emerging Equity Growth Fund C funds, and Wear was manager of Firmco's Portico MidCore Growth and Portico Equity Growth A funds.
Russart was president of Elan Investment Services and was responsible for all trust and investment services operations at Firstar.
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(c) 1997, Milwaukee Journal Sentinel. Distributed by Knight-Ridder/Tribune Business News.
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