RIA M&A Roundup: CI Financial Nabs $5.1 Billion-Asset RIA
Serial acquirer CI Financial’s shopping spree rolls on with its announcement Monday that it will acquire San Diego-based registered investment advisor Dowling & Yahnke, a firm with $5.1 billion in assets under management.
The Toronto-based asset manager, which has become one of the most active acquirers of RIAs in the U.S. over the past year, announced last week that it financed the acquisition of a $2.4 billion-asset Maryland RIA for one of its affiliate firms, Congress Wealth Management, bumping the Boston firm’s AUM size to about $5.8 billion.
Dowling & Yahnke, founded in 1991, serves more than 1,300 clients, primarily individuals, families and non-profit organizations, according to CI’s announcement. Its CEO, Dale Yahnke, had co-founded the firm with Mark Dowling, who retired in 2015.
“Being part of CI ensures enhanced support and services for our clients, continued growth for our firm, and new opportunities for our employees,” Yahnke said in a prepared statement.
The Dowling & Yahnke acquisition marks CI’s 18th transaction, including sub-acquisitions into its affiliate firms, since entering the U.S. RIA space at the end of 2019.
The announcement was also its fourth since March with a multi-billion-asset RIA. The buying spree will provide an estimated $14.7 billion boost in acquired assets upon closing of all the transactions, which include three direct acquisitions and the sub-acquisition by Congress.
CI Chief Executive Kurt MacAlpine on the company’s first-quarter earnings call Thursday said the firm has benefitted from a “snowball effect” when it comes to M&A, crediting its earlier acquisitions of large-AUM firms leading to more inquiries from firms with $3 billion-plus in assets.
The Canadian firm’s total U.S. assets are expected to top $63 billion once the Dowling & Yahnke deal closes, according to the announcement.
MERCHANT INVESTMENT MANAGEMENT
Two Texas firms are combining to create one $5.6 billion RIA, according to an announcement Thursday from serial RIA investor Merchant Investment Management.
Houston-based U.S. Capital Advisors is merging its $4.2 billion-asset wealth management business with Merchant-backed RIA Legacy One Financial Advisors, managing about $1.4 billion in Austin, to form U.S. Capital Wealth Advisors, the announcement said.
The combined firm, based in Houston, will have 95 employees and primarily serve high and ultra-high net worth clients, according to the announcement, which also said there will be additional offices in Austin, Dallas, Georgetown, TX, and New York City.
U.S. Capital Advisors will oversee about $9 billion in assets overall, including its affiliated brokerage division and other entities. The firm will continue operating its other businesses while providing brokerage and alternative investment services to the combined firm, Merchant’s announcement said.
The firms were introduced last year by New York City-based Merchant, which had taken a minority stake in Legacy in 2017, according to the announcement.
“We are excited about the opportunity to work with our tremendous new partners to significantly expand the fee-based advisory business, including outside of our core Texas market,” U.S. Capital Advisors managing partner Patrick Mendenhall said in a statement.
Mendenhall, a former UBS Wealth Management branch manager in Houston for 15 years, left the wirehouse in 2009 and started U.S. Capital Advisors the next year, according to his firm’s website and his BrokerCheck record.
He and one of his counterparts at LegacyOne, Jim Fortescue, will be managing partners at U.S. Capital Wealth Advisors, according to the combined firm’s website, which also says a full integration is expected to take 12-18 months.