Asset Manager Manning & Napier Overseeing $17.1 Billion in AUM Rescinds PPP Application
Posted on 05/01/2020
Listed companies have been receiving flack for getting money through the SBA PPP. Days ago, U.S. Treasury Secretary Steven Mnuchin revealed on television interviews that the U.S. government plans to audit any company that is taking out more than US$ 2 million from the targeted SBA program. Mnuchin told CNBC, “This was a program designed for small businesses.” He added, “It was not a program that was designed for public companies that had liquidity.” Ruth’s Hospitality Group, the Los Angeles Lakers, and AutoNation, all took the money initially, eventually returning the capital.
Fairport, New York-based Manning & Napier, Inc., a global asset manager and listed company, decided to rescind its loan application for the SBA’s Paycheck Protection Program. In early April 2020, two of Manning & Napier’s subsidiaries, Manning & Napier Advisors, LLC and Rainier Investment Management, LLC applied for an aggregate US$ 6.7 million of loan assistance. The funds were not received. Manning & Napier had 307 employees as of December 31, 2019. Manning & Napier revealed that the preliminary March 31, 2020 assets under management were US$ 17.1 billion, which included approximately US$ 12.2 billion in separately managed accounts and approximately US$ 4.9 billion in mutual funds and collective investment trusts.
Did the listed asset manager really need the money? In December 31, 2019, the asset manager company had US$ 226,211,000 in assets and US$ 67,088,000 in cash and cash equivalents.
In an April 23, 2020 press release, “The criteria for funding at the time that Manning & Napier applied for the loan were based on three broad conditions. First, that the Company has fewer than 500 employees. Second, that current economic uncertainty made the loan necessary to support the ongoing operations of the applicant. Third, that over seventy-five percent (75%) of the funds would be used to retain workers and maintain payroll.
Today, the Small Business Administration published updated guidance indicating the loans are not intended for public companies of any size with any actual or potential sources of alternative liquidity and funding.
In light of the new guidelines, which were not previously in place, the Company immediately rescinded its loan application.”