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July 31, 2019 at 03:27 PM
Private equity firm TA Associates is buying Wealth Enhancement Group from Lightyear Capital, four years after Lightyear became WEG’s majority owner. WEG’s RIA has $11.8 billion in client assets vs. $4.7 billion in mid-2015.
The news comes about three months after Goldman Sachs bought United Capital, which has an RIA with about $23.4 billion in assets, for $750 million.
“Whew, big industry news – TA Associates is buying ~$12B Wealth Enhancement Group,” said popular blogger and planner Michael Kitces on Twitter. “It seems the UC-Goldman deal really lit a fire under PE firms to sell at currently favorable valuations?”
As for the deal’s timing, Kitces added: “Striking to see that Lightyear Capital (WEG’s now-former owner) was a seller here after “just” 4 years, but not entirely surprising. The eye-popping valuation that Goldman set for United Capital put $$$ in the eyes of many firms. Too much risk to wait out next bear market cycle?”
TA Associates invests in a variety of industries. It bought a majority interest in NorthStar Financial Services Group, including tech provider Orion Advisor Services, in 2015. In 2016, the private equity group bought asset manager Russell Investments.
“It seems that TA Associates REALLY likes the RIA vertical…,” Kitces said in a Tweet.
Others agree. “Private equity firms continue to vote with their wallets for the independent mode,” according to David DeVoe, head of RIA consulting firm and investment bank DeVoe & Co.
