This Week in RIA M&A: Focus Adds Partner Firm as Other PE-Backed Buyers Strike
The rapid-fire pace of deal-making for registered investment advisory firms showed no signs of letting up in the first week of March.
Focus Financial Partners on Monday announced that it would add Rollins Financial, an Atlanta-based RIA managing about $675 million in assets, to its partner network.
The Rollins team had sought a partnership that would allow them to maintain control of their day-to-day management decisions, said John Eubanks, vice president at New York City-based investment banking firm Park Sutton Advisors, who advised Rollins on the deal.
Focus on Thursday last week announced that it was adding Prairie Capital Management, a $5 billion-asset Kansas City, MO-based RIA, to its partnership network. That same day, the firm’s private equity backers, KKR and Stone Point, revealed that they were divesting some of their 40% stake in Focus through a secondary stock sale.
Separately, Englewood, NJ-based multi-family office Pathstone on Monday announced its acquisition of Cornerstone Capital Group, a $2 billion-asset New York City RIA.
Founded in 2013 by Erika Karp, a former managing director and head of global sector research for UBS’s investment banking division, Cornerstone is focused on impact investing through environmental, social and governance (ESG) analysis.
Pathstone, backed by private equity firm Lovell Minnick Partners, is based in Englewood, NJ. With the Cornerstone transaction, which closed on Sunday, Pathstone added offices in Denver and Manhattan and now has nearly $25 billion in assets under advisement, up from about $15 billion when Lovell Minnick bought its stake in the firm at the end of 2019.
This isn’t the first ‘Cornerstone’ that Pathstone has purchased. In July, it acquired Cornerstone Advisors, a roughly $4 billion-asset RIA in Bellevue, WA, with no relation to Cornerstone Capital Group. It was one of three acquisitions of billion-dollar-plus asset firms that Pathstone made in the past year.
Beacon Pointe Advisors
Also on Monday, Beacon Pointe Advisors said it had acquired Wealth Design, a San Jose, CA-based RIA managing $350 million assets. The deal closed the same day.
The addition marked the 20th office for Beacon Pointe, a Newport Beach, CA-based RIA aggregator backed by private equity firm Abry Partners, and pushed its total AUM past $4 billion.
Wealth Design is led by partner, Gene Ka, formerly a senior advisor with Ameriprise predecessor American Express Financial Advisors. Ka left American Express in 1996 to form Ka, Demmler & Associates, which in 2000 became Wealth Design.
“Adding Wealth Design provides further density to the Beacon Pointe presence in the Silicon Valley area,” Matt Cooper, president of Beacon Pointe, said in a prepared statement, touting the region’s “prolific” wealth creation.
Beacon Pointe’s most recent deals, for $510 million-asset CDA Group in Greenville, SC and $110 million-asset Essex Wealth Management in Vero Beach, FL, came at the end of 2020.
Wealth Enhancement Group
Separately, on Tuesday, serial RIA acquirer Wealth Enhancement Group announced its purchase of North American Management, a Boston-based RIA managing $1.75 billion in client assets.
Specific terms of the transaction, expected to close in April, were not disclosed. WEG, based in Plymouth, MN and backed by private equity firm TA Associates, expects its total assets overseen to approach $30 billion upon closing.
WEG Chief Executive Jeff Dekko in a prepared statement touted the addition of the 20-person team, including nine financial advisors, as an enhancement to his firm’s ultra-high-net-worth and trust services capabilities.
“We look forward to working with NAM’s professionals to further deepen our presence in the strategically critical Northeast region, and to helping them accelerate their growth by leveraging our centralized marketing and technology platforms,” he said.
Most recently, the firm in January said it would purchase $727 million-asset RIA Reby Advisors in Danbury, CT.