Rockford, Ill.-based RIA firm Savant Capital Management announced it completed a transaction Sept. 30 in which it added employee owners, high-profile partners like Ron Carson and $50 million in capital from a range of investors.
The deal solves succession planning and ownership issues for the $5 billion AUM firm, but also gives it the financial heft to continue its growth plans, according to co-founder and CEO Brent Brodeski, while retaining the firm’s independence.
The number of employee owners of the firm has risen from 19 to 47, while Brodeski said he is “doubling down” on his own investment in the firm, has “brought in good partners” and now has the “deep pockets to do more and larger” acquisitions in the RIA space.
The deal took more than a year to put together, Brodeski said, and was prompted by the decision of Savant Capital’s co-founder, Tom Muldowney, to “retire and take his chips off the table.” That decision “set some things in motion” and “early in the process” Brodeski worried that “we’d have to sell the business,” but since the “team felt strongly about staying independent,” he “figured we had the opportunity to grow” the firm “10x,” but needed additional capital and expertise to do so.
Brodeski said “we had 70 capital-raising discussions and 12 proposals.”
Brodeski reported that “there’s a lot of capital out there,” but he and his team determined that many buyers “didn’t bring anything other than the check.” Instead, Savant now has a board that includes Cynosure Group’s Keith Taylor; the former CEO of SmithBarney, Charlie Johnston; three single-family offices; a publicly traded merchant bank; Kingsway Financial Services; Ron Carson of the Carson Group and additional private investors.
Those investors are not only bringing $50 million in capital, plus “additional future capital commitments,” but also their “connections and expertise and knowledge,” Brodeski said. However, the employee owners will retain more than 75% ownership of Savant Capital Management, ensuring its independence, and in a statement, Savant said the private capital investors are “longterm oriented and cannot require Savant to sell the firm.”