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AMG Wealth Nabs Veritable Equity Stake in Big Succession Planning Deal

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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.

AMG Wealth Partners President John Copeland“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.

Copeland joined AMG Wealth Partners last June from Morgan Stanley, where he was a senior partner for one of the firm’s largest private wealth management teams. He was brought on to the newly formed AMG subsidiary to focus on investments in boutique wealth management firms.

During the course of his 23-year wealth management career, Copeland was a managing director at Lehman Brothers in the firm’s private investment management division. He also served as a managing director for e-commerce and wealth management at Credit Suisse First Boston, where he oversaw the development of a wealth advisory platform. Prior to that, he spent 12 years in the private client services group of Goldman, Sachs & Co.

Ensuring Liquidity and Equity for the Future

“We are excited to join AMG Wealth Partners as we believe their unique approach serves the best interests of our clients, partners and employees,” said Veritable CEO Michael Stolper, who founded the firm in 1986, in a statement. “Veritable’s success is based on our firm’s culture, objectivity and commitment to client service, and our partnership with AMG ensures the preservation of these core principles – now and for future generations.”

Affiliated Managers Group isn’t a private equity firm, and it doesn’t “flip” companies that it invests in. AMG’s permanent partnership include the first investment that the firm made in 1994. As of Dec. 31, the aggregate assets under management of AMG’s Affiliates were approximately $338 billion in more than 350 investment products.

“Over the next decade, the wealth management industry will benefit from favorable demographic trends, which will result in a significant increase in the number of high-net-worth individuals and drive growing demand for institutional-quality wealth advisory firms,” said AMG Chairman and CEO Sean Healey in a statement. “Veritable’s decision to join AMG Wealth Partners underscores the strength of our investment model and our reputation as the partner of choice for boutique firms.”

Read more about John Copeland and AMG Wealth Partners at AdvisorOne.


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