Premium content from Triangle Business Journal – by Lee Weisbecker
ROCKY MOUNT – Every day, Sacramento, Calif.-based Investment Trust of California, or CalTrust, commits more than $1 billion in idle cash belonging to Golden State cities, counties and towns into various kinds of investments to get a quick interest return.
And every evening, after the last trade, all eyes turn to the quiet town of Rocky Mount, about 60 miles east of Raleigh, to find out how those transactions actually worked out.
There to provide the answer is Kip Meadows, a Rocky Mount native and Duke University graduate who had the idea back in the late 1980s that he could start his own financial services firm in his hometown.
The result is Nottingham Investment Administration, which has grown its staff to 53 and is now marking another sort of benchmark – having raised total assets under administration to the record level of $28 billion.
“It’s a number that can vary, depending on whether the market goes up or down,” says Meadows. “But it is a big number, and we’re pleased.”
What Nottingham does is sign up clients such as CalTrust, mutual funds, insurance companies, hedge funds, government endowments and foundations and others and performs their back-shop operations, including trade reconciliation, shareholder services and other such nuts and bolts tasks. Revenue comes in the form of fees charged for services provided.
The California cash pool has been a longtime customer, as has a similar operation in the state of Pennsylvania and an insurance company that has been in “the top three in the world.” Meadows, who declines to name the insurer, says he is constantly stumping to recruit new business because mergers and resource reallocations alter his client list.
But that’s just in the normal course of business.
What happened back in 2008 and 2009 was far from normal, however.
Against the background of the financial crisis and stock market slump, the array of money managers on Nottingham’s client list faced a double hit, both having to write down the value of their assets and honoring investors’ panicky demands for their money back.
Meadows, in turn, saw his assets under administration drop into the $18 billion to $20 billion range.
“Between May 2008 and March 2009, I really didn’t know what was going to happen. Nobody did. It was a scary time,” he says.
Battening down the hatches, Meadows held on, and in the months since has seen his assets under administration bulk up once again. By 2009, in fact, Nottingham made the list as one of the world’s top 52 hedge fund managers in terms of assets managed, according to hedge fund marketing expert Richard Wilson.
As the money began flowing back in, Meadows staffed up to handle it, adding 10 positions in recent months. He says he’ll possibly add up to four employees in 2011 if a few new prospects actually become clients.
And that is good news in the Rocky Mount/Nash and Edgecombe county areas, a region that still suffers from double-digit unemployment and is in “dire need” of new jobs.
“Nottingham has been a breath of fresh air,” says Eddie Baysden, CEO of the Rocky Mount Chamber of Commerce. “Kip Meadows has been an outstanding businessman, and he has been very important in one particular area: recruiting young professionals and their families to come settle in this area.”