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March 22, 2012 at 06:55 AM
In its first transaction since its launch last year, AMG Wealth Partners announced Tuesday that it will acquire a majority equity interest in Veritable LP, a wealth management firm that handles more than $10 billion for about 200 ultra-high-net-worth families.
Veritable, a Newton Square, Pa., open-architecture wealth advisory with 84 employees including 36 investment advisors, will hold a significant equity interest in the business and continue to direct its day-to-day operations when the transaction closes.
Terms of the transaction were not disclosed, but AMG Wealth Partners President John Copeland said Veritable managers and employees who have made long-term commitments to their firm will hold a significant equity interest in the business. AMG Wealth Partners, based in West Palm Beach, Fla., is a subsidiary of Boston-based Affiliated Managers Group Inc. (NYSE: AMG), whose investment structure involves revenue-sharing agreements.
‘A Lot of Noise Around Consolidation, Acquisition and Roll-Up’
Copeland characterized the deal as a succession planning opportunity for Veritable.
“There is a lot of noise around consolidation, acquisition and roll-up in the independent advisory space. None of those terms apply to us,” Copeland (left) told AdvisorOne In an interview on Tuesday. “In the life cycle of a firm, as the founders begin to think about succession planning, they have to contemplate how they, as majority equity owners, gain liquidity and in what form, and how important it is to them to have the firm remain what it is.”
At the same time that AMG provides liquidity, it helps ensure that shareholders remain invested in the business over successive generations, Copeland said. “We want to make sure all other important partners remain invested, and we want to make sure over time that there’s a program in place as people want liquidity in their stock in 10, 15 or 20 years, and that equity gets reinvested in the business,” he said.
