Marty Bicknell’s Mariner Sells Minority Stake to L.A. Buyout Shop
Mariner Wealth Advisors is selling a minority interest to a Los Angeles-based private equity shop in a deal that will allow founder Marty Bicknell to take some chips off the table while still retaining control of his fast-growing firm.
Leonard Green & Partners will be acquiring an unspecified portion of Mariner, which manages $35 billion in client assets, as well as two board seats as part of the transaction, according to an announcement. The shares in the Overland Park, Kansas advisory firm are being sold from 1248 Holdings, a holding company controlled by Bicknell and his family.
Following the deal, Bicknell will remain the majority owner of the closely-held firm directly through his personal stake, and his day-to-day involvement will not change, he said. Pricing and other terms of the transaction, which Bicknell said is expected to close June 30, were not disclosed.
LGP, whose current portfolio consists primarily of buyouts of firms in the consumer, business and health care services industries, according to its website, will invest “significant capital” to fuel Mariner’s expansion-by-acquisition plans, Bicknell said.
Mariner has not announced a deal since March 2020, a pause that Bicknell said was intentional as it was digesting the dozen RIAs it purchased in the prior year. He said Mariner is expecting to announce four to six deals by the end of June, and with the capital infusion from LGP, he’s hoping to do deals and integrations on more of a “continuous” basis.
“The number of deals across the industry is continuing to grow every year and I don’t see that changing for five years, maybe longer,” he said. “The number of firms that are looking for scale, for succession and for opportunity for their next-gen talent is only continuing to grow.”
Bicknell declined to specify growth targets but offered the lofty goal that his 350-advisor firm could rival the thousands of brokers at wirehouse firms in the not-too-distant future. (The RIA has done two dozen deals since Bicknell, a former branch manager at Wells Fargo predecessor A.G. Edwards, founded it in 2006.)
“There’s no reason that, in five years, there can’t be an RIA that’s approaching 5,000 advisors and competing head-to-head with the wires, and I see no reason that it can’t be Mariner,” Bicknell said.
The search for a private equity partner began in earnest about six months ago when Mariner hired investment banking firm Ardea Partners to search for a backer, Bicknell said. There were about a dozen firms he spent time with before narrowing it down to LGP and two others in the final round.
Acknowledging that LGP was not a particularly familiar name to the RIA space, Bicknell said it saw Mariner as an “opportunity for them to throw their hat in the ring and really get to know a specific firm.”
LGP’s lack of familiarity was an advantage, Bicknell said, because it meant they would defer to him in decision-making and wouldn’t force him to relinquish control over his firm.
“One thing they said over and over again was, ‘We’re not operators, we’re investment capital, and we want to back founder-led firms,’ and that kind of perspective just fit in perfectly with what I was looking for,” Bicknell said. He also declined to discuss pricing and other specifics.
LGP, which did not respond to a request for comment, has invested in more than 100 companies through “traditional buyouts, going-private transactions, recapitalizations, growth equity, and selective public equity and debt positions,” and has raised more than $40 billion of committed capital, its website says.
The RIA space in recent years has seen several large acquirers take capital from more recognizable PE players like KKR and Stone Point Capital, backers of Focus Financial Partners, or Thomas H. Lee Partners, backer of Hightower Advisors, or Oak Hill Capital and Genstar Capital, behind Mercer Advisors.
Creative Planning, another large Overland Park RIA assisted by Ardea Partners, in February 2020 sold a minority stake to New York-based PE firm General Atlantic, whose other holdings included Airbnb, Uber, Buzzfeed. Creative completed at least eight deals last year, and its assets under management have grown from around $50 billion at the beginning of 2020 to $75.6 billion as of its April 20 Form ADV update.