SLI Saga Update: Cahill Responds

Dan Cahill has broken his silence, in response to recent comments made by Standard Life Investments about his team’s track record and the circumstances that led to their departure. He and I spoke via telephone yesterday, with Cahill saying he would be limited in his comments, per direction of his attorneys.

At particular issue was an LBO Wire story on the situation, in which SLI spokesman Richard England asserted that Cahill’s Boston-based team did not assume any deal-sourcing, marketing or fundraising functions.
 
“We made over 20 fund investments and 12 co-investments,” Cahill told me. “Every one was sourced through us, except for one deal that came through Europe… Some of the fund relationships I had from my previous job [with State Street]. We also brought in a substantial number of clients for our product, and even sourced the largest client for their European product.”

I emailed England for reaction, and was initially told: “Given that we are in legal discussions I don’t think it’s appropriate we conduct these discussions through the media.” When pressed on the deal-sourcing matter, England walked back a bit from his initial statement: “On that particular point you are correct. Although the great bulk of marketing and fund raising was and is done from Edinburgh, the Boston team had been involved in certain deal making/fund raising activity in the U.S.”

Cahill also confirmed prior reporting that the team left after a long dispute over economics: “They tried to transfer us to a new entity with onerous employment terms,” Cahill explains. “They would not give us partnership equity. We tried to negotiate for weeks without success, but ultimately declined to become part of the new entity.” SLI told a UK daily that only six of the seven team members had left, but Cahill says the only holdout was his secretary, rather than an investment professional.

Finally, he said that the North American team had over $700 million in assets under management at the time of its departure. This included four funds — two funds-of-funds and two co-investment funds.

It is unclear what happens next. Cahill and his team are said to have not yet plotted their next move, save for the expected legal entanglement with SLI. The North American portfolio will continue to be managed out of Edinburgh for the time being, although some LP types are already sniffing around the possibility of being hired as replacements. But there is one thing that’s a virtual certainty: Jonny Maxwell will be smiling for weeks to come.