HighTower is getting a boost of capital from the private equity firm Thomas H. Lee Partners, while THL is picking up a large stake in the RIA consolidator — which has about $50 billion assets and close to 190 RIAs. Plus, THL plans to invest $100 million in HighTower after the acquisition closes to further support the firm’s growth in the wealth management industry.
As part of the deal, the funds affiliated with THL will acquire a significant interest in HighTower. At the same time, some of HighTower’s institutional investors will sell their equity interests in the firm.
The news comes about six months after rollup rival Focus Financial Partners said Stone Point Capital and KKR, which value this RIA aggregator at about $2 billion, were buying a majority stake in its business.
“THL fully supports our mission of delivering objectivity, transparency and independent thinking to investors, while always putting their best interests first,” said HighTower CEO Elliot Weissbluth, in a statement. “Our partnership will help us reach more advisors and clients who refuse to settle for the industry’s status quo.”
HighTower says it will take advantage of THL’s industry experience and business development capabilities to enhance its platform and continue its momentum.
“We want to be at the forefront of the changes disrupting the wealth management space, and we proactively sought out HighTower as the ideal partner — they are driving change and have been succeeding at it for a decade,” said Ganesh Rao, managing director at THL, in a statement.
Dave Pottruck, the former CEO of Charles Schwab and the chairman of HighTower’s board, remains one of the largest individual investors in the company. Weissbluth and Doug Brown of DLB Capital, HighTower’s first large institutional investor, are not selling any equity as part of this transaction.
HighTower has added 22 advisor teams so far this year. In May, it bought 10 financial advisor teams from WealthTrust. Its total client assets are up 27% from Jan. 1.
The deal with THL is subject to customary regulatory approvals and closing conditions and should close in the fourth quarter or in the first quarter of 2018.
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