A new, high-powered money-management firm has dived into the Louisville market.
Seven former employees of J.J.B. Hilliard, W.L. Lyons have formed Parthenon Capital Management, which began operations last week.
“We like the visual imagery and strength of the name,” said Todd Lowe, president and chief operating officer.
Lowe, former director of research at Hilliard Lyons, has been joined by J. McFerran Barr, former president of Hilliard Lyons Trust Co. Thomas Corea, who focused on stocks for the Investment Management Group at Hilliard Lyons and Tony Coffey, who specialized in fixed income. Rounding out the staff are three former Hilliard Lyons administrators.
Lowe left Hilliard Lyons in mid-December, shortly after the brokerage firm was acquired by PNC Bank.
“We wanted to do something entrepreneurial,” he said. “We felt there’s a market for a locally owned moneymanagement business.”
arthenon will target institutional clients and high-networth individuals – minimum account size is $500,000. It already has landed a few clients.
Its approach to equities is to invest in undervalued companies with consistent earnings and a high return on assets and equity, and then hold for the long term.
The firm, at 9900 Corporate Campus, off Hurstbourne Parkway, has custodial and trading agreements with Commonwealth Bank & Trust and Charles Schwab.
“We hate to lose good people, but we have a deep bench,” said Jim Allen, an executive vice president for Hilliard Lyons. The Investment Management Group handles about $5 billion with a staff of about 65.
HILLIARD LYONS, mean-while, has been growing since its merger with PNC, and it is maintaining its autonomy.
Next month, Allen said, about 65 PNC brokers will become Hilliard Lyons brokers, and they will form the nucleus for opening about 10 branches in Pennsylvania, New Jersey and Delaware, plus a second branch in Cincinnati.
Overall, he said, Hilliard Lyons has about 1,300 employees, up from about 1,275 before the merger, but a year from now the total could be approaching 1,500, with the bulk of the growth in the Northeast.
The Louisville-area presence, meanwhile, is expected to grow from a pre-merger total of more than 500 employees to nearly 600 in about a year, Allen said.
GE riding high
Shares of General Electric have outperformed the Standard & Poor’s 500 Index over the years and will do so again this year, predicts Jack Welch, GE’s chairman.
“I’m not here to predict earnings, but we’ll outperform the S&P and the companies in it,” he said last week during a satellite interview broadcast by Edward Jones & Co. and attended by about 250 people in Louisville.
Welch didn’t mention the fate of Appliance Park in Louisville, but he did say that he expects a smooth transition when he steps down as chairman that GE’s global business, including acquisitions in Japan, will help maintain the company’s double-digit growth rate and that being a big company is an advantage – “Size gives you the ability to experiment, to take risks.”
According to Zacks Investment Research last week, nine analysts and brokers rate GE a strong buy, while eight others rate it a buy and two rate it a hold. Analysts expect earnings to grow 14 percent this year to $3.20 a share, and the consensus for 2000 is about another 14 percent gain to an average estimate of $3.62 per share.
Analysts for A.G. Edwards noted GE completed 93 acquisitions costing about $18 billion last year, and those are expected to add about $7 billion in revenue this year. “Cash flow is very strong and growing.”