Management Firm Started by Cisneros to Close

The money management company started by Housing and Urban Development Secretary Henry G. Cisneros will close its doors at the end of the month, company executives said.

Cisneros no longer is involved in the company, having sold his stake when he became HUD secretary in 1993.

Gilbert Garcia, president of the company, said profit of Cisneros Asset Management Co., established in 1989 by Cisneros when he was mayor of San Antonio, was hurt by client defections and unsuccessful attempts to sell the firm.

The company once managed as much as $760 million in fixed-income assets, but that dropped to about $250 million in June. Garcia said the Houston-based company now manages just less than $30 million in assets.

Shareholders failed to deliver the two-thirds vote required for a deal struck in March in which Smith, Graham & Co., a Houston money management firm, would have bought substantially all of the assets of Cisneros Asset, Garcia said.

Among the shareholders voting against the sale was West Loop Investments, an entity created by First Capital Asset Management in New York that wanted to acquire Cisneros Asset, he said.

Later, Cisneros Asset struck a deal with West Loop in June to sell substantially all the stock of Cisneros Asset to West Loop, Garcia said.

The deal subsequently collapsed. By June 30, Cisneros Asset “received terminations or indications of terminations of approximately $500 million” in client assets it was managing, he said.