AssetMark Financial Holdings, the turnkey asset management provider for independent financial advisors that was acquired by Huatai Securities Co. Ltd. almost three years ago, is now planning to go public.
The firm, which has $50 billion in assets under management, filed a draft registration statement on Form S-1 with the Securities and Exchange Commission for a public offering of common stock to raise approximately $125 million that it expects to use to repay a portion of a $249 million term loan, and for general corporate purposes including working capital, operating expenses and capital expenditures. The filing notes, however, that the firm “cannot predict with certainty all of the particular uses for the proceeds of this offering” and that “management will have broad discretion in applying the net proceeds” of the offering.
The number of shares to be offered and the price range for the offering “have yet to be determined” along with the IPO date, which will be set “after the SEC completes its review process, subject to market and other conditions,” according to the company.
Through its fully integrated platform, AssetMark provides advisors access to a broad range of automated processes including new account opening, portfolio construction, streamlined financial planning, customer billing, investors reporting and progress reports. As of March 31, 2019, its platform served approximately 137,000 investor households through approximately 7,600 advisor relationships, according to the SEC filing.
AssetMark, which was founded in 1996 and eventually acquired by private equity owners Aquiline Capital Partners and Genstar Capital before it was sold to Huatai Securities, has been growing steadily. Assets doubled between December 31, 2014 and March 31, 2019, from $25 billion to $50 billion, for a 17% compounded annual rate, and net flows from investors grew from $2.4 billion in 2016 to $5.9 billion in 2018.
For the year ended December 31, 2018, the firm had total revenues of $363.6 million, net revenues of $245.2 million and net income of $37.4 million.
AssetMark has been steadily adding to its technology platform, launching WealthBuilder, a goals-based digital advice solution, Smarter Account Setup in 2017 and a portfolio analytics tool, PortfolioEngine, in 2016.
Earlier this year it acquired Global Financial Private Capital, a suite of integrated wealth management services for institutional and individual investors, for $35.9 million in cash, adding $3.8 billion in assets.
In its filing with the SEC, AssetMark said it expects to increase its advisor base via existing and new relationships, expand its wallet share of existing advisor clients, and continue to help advisors grow their business through consulting engagements and comprehensive platform support.
The firm also hopes to expand services to new segments, through new product, service and capabilities offerings, including cash management and business consulting and trading. It said it may also pursue acquisitions that expand its appear to independent, fee-based advisors and the clients they serve.