MEMORANDUM TO: FROM: SUBJECT: DATE: JOHN KEELEY JR.

JESSICA SHAMSHURA KAMCO PAST, PRESENT, AND FUTURE FEBRUARY 7, 2014

Upon introduction to Keeley Asset Management Corporation (KAMCO), I took the time to discover what the corporation had to offer. Research into the corporation's history, mission, client base, competition, sources of revenue, and hierarchy has helped me realize how KAMCO contributes to society. Using my research hand in hand with my experience working for the company, I present a suggestion to expand the corporations single office to more than one central location. KAMCO was founded in 1982 as a privately-owned Chicago-based money management firm. However, the ideal foundations were long in the works. Founder, John L. Keeley, Jr., used his previous financial experience to start Keeley Investment Corp. in late 1977. He wanted to establish a client base and provide them with unique contract research into Mutual. Through his individual experience, Keeley was able to create a corporate understanding of his financial (investment) principles leading to the creation of KAMCO. As of June 30, 2013, KAMCO manages $5 billion in assets, offering seven mutual funds in both retail and institutional class shares. Within this, KAMCO offers two distinct investment strategies which complement one another. The first is the restructuring strategy, which focuses on companies undergoing major corporate changes. Complementing this first strategy is the dividend strategy which helps investors minimize the volatility associated with some stocks. Overall, KAMCO's philosophy is to deliver above average, long-term results, while reducing portfolio risk through the application of a prudent, opportunistic and unique investment strategy. KAMCOs "Bottom-Up" philosophy consists of first reviewing individual company characteristics rather than forecasting broader economic trends; which creates an attractive investment opportunity for potential clients. The majority of KAMCO's portfolios are made up of stock of companies in the following categories; corporate spinoffs, companies emerging from bankruptcy, event driven or special situations, and insurance savings and loan conversions. By attracting clients like the ones above, KAMCO is able to create various sources of revenue. As an asset management corporation, KAMCO is able to provide its' investors with more diversification and investing options than these investors would be able to find on their own. KAMCO's diversification comes from the ability to provide a larger pool of resources, all while pooling assets together and paying out proportional returns. Additionally, KAMCO earns income through charging service fees for their previously discussed investment strategies and individualized financial methods. President of KAMCO, John Keeley, also serves as the Lead Portfolio Manager. Alongside him are 12 investment professionals, averaging 27 years of experience. Additionally, there are six departments in which KAMCO employs. These

departments are Client Services, Financial Services, Trade Operations, Investment Team, Management, and Sales and Marketing. Each department is run by a Vice President who oversees the given departments activities and decision making processes, while those within the departments help carryout daily research and activities. Like all asset management corporations, KAMCO has its' fair share of competitors. These larger asset management corporations include J.P. Morgan, William Blair, Baird Asset Management, and Chicago Capital Management. Another competitor found in the Midwest area is Titanium Asset Management. Titanium acquires the same sort of clientele as KAMCO, and though in Wisconsin still reaches out to Chicago-based investors. Through the examination of the discussed organizational behavior and my time employed at KAMCO, I have a better realization of how KAMCO contributes to society. By investing this money back into society KAMCO is not only able to profit, but they create the ability to assure a more stable financial environment for all involved. I have realized that this ability not only effects KAMCO and its' clients, but also allows for a more stable financial economy. Also, we all need to save for our future, both individually and holistically. KAMCO provides this opportunity to individuals and corporations who would not be able to find such investments on their own. My individual research and time with the company has lead me to believe that opening at least one other office within the United States would be beneficial to the growth of the company. KAMCO currently has 6 External Sales team members that are split into regions. They work on the road and very rarely come back to the office here in Chicago. Although having them across the country already allows for KAMCO to have a broad customer base, giving them another central office could make their jobs easier and more efficient. Not only will current customer satisfaction increase, but the number of new customers will increase as well. According to author of The Advantage of Expanding Business, Justin Johnson, The increased pool of potential customers can dramatically improve sales. The majority of KAMCO customers are from the Midwest region, specifically Chicago. Opening at least one other office in a central location will attract customers in that specific location. It will give those customers a greater sense of security. Knowing their portfolios are stemming from a legitimate place and that they are not just dependent upon the External Sales representative from their region will give them more trust in the company. This is important to maintain and grow client base. Multiple office locations will also allow for KAMCO to be able to hire more employees. People are often recognized as the most important asset of a company. Acquiring new and talented personnel is a clear-cut advantage.(Johnson) By hiring new staff, research can be better split up. In order to be able to invest for the customers it is important to have an in-depth understanding of what you are investing in and why. Not only will the current funds be better understood, but new ones will be able to be established. Not to mention, this would create an opportunity for larger sources of revenue. This will allow for the company to grow and better itself and in turn benefit the clients. Overall the advantages of expansion would significantly outweigh the disadvantages.

Johnson, Justin. "The Advantages of Expanding Business." Small Business. Houston Chronicle, Web. 07 Feb. 2014. http://smallbusiness.chron.com/advantages-expanding-business-21144.html
"Mutual Funds." Keeley Funds. Keeley Investment Corp, Web. 07 Feb. 2014.