This Week in RIA M&A: Wealth Enhancement Group Buys $1.6 Bln-Asset CA Firm
Wealth Enhancement Group, a serial acquirer of registered investment advisors, struck again with the announcement Tuesday it was purchasing Pillar Pacific Capital Management, a California firm managing $1.6 billion in client assets.
With the deal expected to close in June, Plymouth, Minnesota-based WEG said it will gain its first beachhead on the West Coast. The acquiring RIA, backed by private equity firm TA Associates, also said the deal would push its total brokerage and advisory client assets to roughly $31.8 billion.
The Pillar Pacific deal follows on the heels of WEG’s announcement last month that it was purchasing North American Management, a Boston-based RIA managing $1.75 billion in client assets. In January, the firm said it would purchase $727 million-asset RIA Reby Advisors in Danbury, Connecticut.
WEG Chief Executive Jeff Dekko acknowledged in a prepared statement that the deal marked a departure from his firm’s historical focus on ‘key’ markets in the Midwest and on the East Coast.
“As part of our longer-term strategy, however, we have always envisioned developing a strong presence in the vital Los Angeles and Bay Area regions,” he said.
Pillar Pacific will rebrand under the Wealth Enhancement Group name. Its CEO Mindy Ying will join WEG as a managing director and senior vice president, while Arthur French, the firm’s founder and chief investment officer will become WEG’s director of research, according to the announcement.
Creative Planning, an Overland Park, Kansas-based RIA that in recent years has become an aggressive acquirer of smaller firms, on Tuesday made its second deal announcement of the year.
The $76 billion-AUM firm said it was buying Castle Wealth Advisors, an Indianapolis, Indiana-based RIA managing $320 million in client assets. Castle Wealth, according to the announcement, provides business succession planning and valuation services.
Terms of the acquisition, which closed on April 15, were not disclosed.
Castle was founded in 1973 by Gary Pittsford and claims the status as Indiana’s oldest fee-only financial advisory firm.
“Castle is a well-established firm with an innovative approach that aligns perfectly with our values and vision,” Creative Planning CEO Peter Mallouk said in a prepared statement.
The acquisition follows Creative Planning’s purchase of the $6 billion-asset retirement division of Iron Financial, which was announced in February but actually closed in late 2020.
Creative Planning last year sold a minority stake to private equity firm General Atlantic and was among the most active buyers in 2020 with eight deals completed, according to a January report from advisory-firm investment bank Echelon Partners.
Parsippany, New Jersey-based advisory firm Summit Financial on Tuesday announced its 13th minority investment in an RIA in a deal that expands its reach to foreign clients.
Through its affiliate Summit Growth Partners, which invests in RIAs and recruits breakaway advisors, the firm said it acquired a minority, non-controlling stake in Kandor Global. The Miami-based RIA focuses on serving ultra-high-net-worth Latin American clients and is Summit’s first purchase in the international space, according to the announcement.
Summit Financial in January had announced the launch of SGP, a joint venture with serial RIA investor Merchant Investment Management, which took a minority stake in Summit in August of 2018. The firms said at the time they had already invested in 12 different firms through SGP, but they did not identify any specific investments.
Kandor, which manages around $325 million in client assets, was seeking a partner to help it
“propel growth initiatives” and gain access to expanded resources, “in-house expertise” and capital, according to the announcement. The firm was launched in 2020 by CEO Guillermo Vernet, who had stepped down from his role as president of Insigneo Wealth Advisors, an RIA owned by Miami brokerage Insigneo Financial Group.
Altogether, Summit oversees $4.1 billion in advisory assets, according to its most recent Form ADV. Its chief executive, Stan Gregor, was a longtime brokerage executive with Wells Fargo, Wachovia and Quick and Reilly, and also briefly served as co-CEO of Cantor Fitzgerald Wealth Partners. Summit Financial also in April recruited a former Morgan Stanley New Jersey broker David S. Weinerman to its RIA.