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Hightower Makes Its Biggest Acquisition Ever

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RIA aggregator Hightower Advisors has acquired Bel Air Investment Advisors, a Los Angeles-based wealth management firm with $8 billion of assets under management and 43 employees, including 10 financial advisors.

The purchase, which represents the largest acquisition in Hightower’s 12-year history, follows nine transactions by the company in 2020.

The deal “is a heck of a way to start off the new year,” Hightower CEO Bob Oros said in a interview Monday.

Hightower now has 114 advisory businesses in 33 states. As of Sept. 30, it had $61.6 billion of assets under management and $81.4 billion of assets under administration.

The deal to acquire Bel Air, announced Monday, was signed Dec. 31 and is expected to close in the first quarter of 2021, according to a Hightower spokesperson. Terms were not disclosed.

Bel Air’s Background

Founded in 1997, Bel Air provides customized wealth management services and investment solutions exclusively to ultra-high net worth individuals, families, trusts and foundations with $20 million or more in investable assets.

Of Bel Air’s 10 advisors, eight are based in Los Angeles and two are based in its San Francisco office, which Bel Air is looking to expand, according to Todd Morgan, its chairman and co-founder. Prior to Bel Air, he started his career at Goldman Sachs in Los Angeles.

“We’re delighted with this new partnership” and “my whole team is looking forward to the growth prospects that we have ahead of us  both on a local level” because Hightower’s resources will help it expand the San Francisco office and also “on a nationwide level,” Morgan told ThinkAdvisor.

“It’s always been our dream to expand meaningfully outside of California with the model that we have and with” the help of Oros and HighTower, “we can achieve this over the years to come,” Morgan explained.

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Bel Air was acquired by Montreal-based, publicly-traded company Fiera Capital in 2013. Its move to Hightower returns the firm to private ownership, with Bel Air’s founders and leaders gaining “key roles with equity in” Hightower, the companies said in a joint announcement.

Explaining his firm’s reason for acquiring Bel Air, Oros told ThinkAdvisor: “Hightower is very attracted to high-quality businesses with great leadership teams that are multi-generational with an orientation towards growth, but most of all people that are very focused on serving their clients with world-class advice. And Todd and his team at Bel Air checked every one of those boxes, plus a few.”

Hightower’s Growth Plans

Looking to the rest of 2021, Hightower has “our own internal expectations for the business” when it comes to growth targets, he said, declining to share specifics.

But “for us, it is always quality over quantity,” Oros stressed, explaining: “If you start to get too focused on numbers of acquisitions or assets and revenue acquired, it has the risk of potentially encouraging you to make bad decisions.”

Hightower’s 2020 transactions included the merger of New York advisory firm Fischer & Co.  with another New York advisory firm, the 54-year-old Stralem & Co., which has $280 million in assets under advisement.

Hightower also said it took a “significant” equity stake in Hart Financial Group, an $800 million financial advisory firm in Austin, Texas, that has five advisors.

The other seven deals of 2020 involved buying, taking a stake or investing in Argent Wealth ManagementStearns Financial Group , Teak Tree Capital Management, Private Vista, Frontier Investment Management.; Osborn Williams & Donohoe, and Wellspring Associates.

RBC Capital Markets and Stifel GMP served as financial advisors to Fiera Capital in the Hightower-Bel Air transaction, while also assisting Bel Air management in structuring the Hightower partnership.