After weeks of speculation, Lightyear Capital has confirmed that it – along with one of Canada’s largest pension investment managers, the Public Sector Pension Investment Board – has agreed to acquire AIG Advisor Group.
The transaction is subject to customary regulatory and other approvals, and terms of the transaction were not disclosed.
Recruiter Jon Henschen had predicted Lightyear’s involvement weeks ago, but he called the involvement of the Canadian manager, known as PSP Investments, an “unknown element.”
“I don’t really know much about [PSP] or their track record,” he said in an interview with ThinkAdvisor. “Maybe the cost for buying the AIG broker-dealers was more than Lightyear could handle alone so they got someone else to invest with them.”
His guess is that PSP Investments will be more a “silent partner” while Lightyear, a New York-based private equity firm focused on financial services investing, “runs the show.”
“Lightyear has the background,” Henschen said. “Does a pension fund know the business? I think they’re more of a financial support role.”
As part of the deal, investment funds affiliated with Lightyear and PSP Investments will have the majority of the seats on Advisor Group’s Board of Directors.
In a statement, Guthrie Stewart, senior vice president and global head of private investments at PSP Investments, said: “We are pleased with this transaction, which is in line with PSP Investments’ private equity strategy of making sizable, direct investments in high-quality companies alongside experienced partners. We see multiple growth levers to drive Advisor Group’s future performance and look forward to collaborating with Lightyear and the Advisor Group management team to deliver on that plan.”
In addition to announcing the acquisition, Lightyear has also announced plans for Advisor Group’s upper management.
While Erica McGinnis will continue in her role as CEO of the AIG group, Valerie Brown, former CEO of Cetera Financial, will join AIG full time at the closing of the transaction to serve as executive chairman of the Board.
Henschen had heard rumors that Brown would be back in the picture.
“Valerie was good when she had her stint at Cetera. She has a good track record,” Henschen told ThinkAdvisor.