If fund shareholders agree, Integrity Mutual Funds will enter into an agreement with Corridor Investors LLC and Viking Fund Management to purchase their fund division, which would go into effect by July 1.
The proposed merger would combine Integrity's 12 mutual funds with Viking's four mutual funds under Corridor, a holding company for Viking. Because Viking and Integrity have two nearly identical mutual funds, if the transaction goes through there will be 14 mutual funds available, with all portfolios remaining intact. If all goes through, Integrity and Viking will have combined assets of $260 million.
"The Intregrity Mutual Fund board of directors wanted to give their full attention to one or the other (fund division or capital financial services). With the growth history, we thought it would be more effective to stay with the broker division," said Brad Wells, president and CEO of Integrity. He added that the capital financial services division has grown to 370 registered representatives nationwide since Integrity acquired the company eight years ago.
Article Photos
Whitney Pandil-Eaton/MDN
Located at 116-1st St. SW, Viking Fund Management, the only other mutual fund company in North Dakota, is in the process of merging with Integrity Mutual Funds.
Integrity Mutual Fund might drop the “Fund” part of the company name if the sale of the fund division is accepted by shareholders.
"Changes in (IMF) management over the years had an impact on the direction of the company," Wells said. "This was not an original decision...but with the current market it made sense to do so. The financial service industry has been hit the hardest, so this gives us an opportunity for both divisions to focus on each individual aspect and grow."
Based in Minot, Viking Fund Management was founded in 1998 by Shannon Radke, a former Integrity employee, and is the only other mutual fund company operating in the state.
"By selling the fund division to a local entity, most if not all of the jobs will be retained," said Radke. "If it had been sold to an outside entity, the 25 or so jobs in the fund division would have been lost entirely, so it's good for the community."
Integrity employees who currently manage the fund will continue to do so, but will become employees of Corridor.
"The goal is to keep things as stable as possible by having people talk with the same reps they have for years," said Laura Anderson, Integrity's mutual fund division president. "We want to maintain what is already in place in terms of the community, the people and the staff."
In an effort to do that, certain officers and employees of Integrity and Viking, as well as outside investors, joined and formed Corridor in order to purchase the management rights. Those who founded Corridor include Robert Wolstad, founder of Intregrity, and Shannon Radke, founder of Viking. If and when the transaction is complete, Viking would become a wholly-owned subsidiary of Corridor and through that subsidiary, Corridor will provide investment advisory, distribution and other services to the mutual funds currently in the Integrity and Viking fund group.
The company is already in the process of notifying Integrity's representatives, Anderson said, and shareholders will be contacted soon. Of the reps that have been notified, she said they have given mostly positive feedback.
"Some were curious and others were nervous but after we explained everything, they thought it was a good plan," she said.
"Essentially, we are combining the experience of both parties, which is a positive for everyone," Radke added.