Focus Financial Partners said Monday that the private equity firm Centerbridge Capital Partners would be investing $216 million in the partnership, which includes 25 independent wealth management firms.
The arrangement should close in the third quarter, with Focus partners and management retaining a majority of their ownership in the company. Focus Financial Partners’ investors, Summit Partners and Polaris Ventures, will continue as shareholders.
“The independent RIA industry is a growing, $3.2 trillion market that continues to attract fiduciary-minded wealth managers,” said Rudy Adolf (left), founder and CEO of Focus, in a press release. “As a market leader, Focus is excited about Centerbridge’s investment in the company as it further validates our model and the growth potential of our company and the industry as a whole.”
“This investment adds to our deep pool of available capital as we continue to work closely with our partner firms to support their own growth initiatives,” Adolf said. “Most importantly, Centerbridge’s investment creates liquidity for many of our shareholders at an attractive return.”
Founded in 2006 with $3.5 billion in client assets, New York-based Focus has been expanding at a fast clip by adding veteran RIA and ex-wirehouse teams. In the past 12 months, according to the partnership, Focus wrapped up 10 transactions and boosted client assets by $14 billion.
The group’s independent advisors and their practices now have some $62 billion in client assets and more than $250 million in yearly revenue.
“Consistent with other investments Centerbridge has made in market-leading businesses and industry consolidators across various industries, Focus has a strong track record, first-class management team, and a well-developed infrastructure which position it for further expansion,” said Matthew Kabaker, senior managing director at Centerbridge, in a statement. “We are pleased to have the opportunity to partner with Focus management, its partner firms, and existing capital providers, Summit Partners and Polaris Ventures, in the next stage of their growth.”
New York-based Centerbridge Partners has roughly $20 billion in capital under management as of May 2013. Its business focuses on private equity and credit investments.