Top 10 RIA Deals in the First Half of 2022

Mergers and acquisitions in the RIA sector continued to be relatively strong in the first half of 2022 despite challenges that included stock market volatility and ongoing inflation, according to DeVoe & Co. and Echelon Partners.

“RIA M&A activity continues to be very robust, despite the environment,” David DeVoe, CEO and founder of DeVoe & Co., recently told ThinkAdvisor.

“Challenging global and national economies, a volatile stock market, and interest rate increases typically lead to an M&A slowdown,” he noted.

But “given the momentum of the activity year-to-date,” he said, “the year will most likely exceed the 241 transactions last year.”

DeVoe expects 265 transactions in 2022.

He predicted, however, that the “trajectory” of RIA M&A activity “will flatten” going forward.

Based on deals in which the sellers were U.S. RIAs with over $100 million in assets under management, DeVoe said the top RIA M&A deal in the first half of this year was Penfund’s $75 million investment in Mariner Wealth Advisors ($55 billion). That deal was followed by Genstar Capital’s investment in Cerity Partners ($45 billion), he said.

Total wealth management M&A activity declined for the second straight quarter in Q2 this year, according to Echelon.

“Still, the activity in the first half of the year remains elevated relative to historic trends and keeps 2022 on pace to be another record-breaking year, barring a significant slowdown in deal activity in the second half,” Echelon said in its Q2 RIA M&A Deal Report.

“Deal activity continues to be dominated by ‘Strategic & Consolidator’ acquirers who announced 45.6% of wealth management transactions so far in 2022,” Echelon said, adding: “Capital remains available due to continued interest from both private equity and debt sources.”

Below are the top 10 RIA M&A deals in the first six months of 2022 based on the seller’s assets, according to Echelon, which includes wirehouse buyers, unlike DeVoe & Co. (DeVoe says it focuses on the acquisitions and mergers of “true” RIAs based in the U.S. with $100 million or more in AUM. Echelon includes U.S. and non-U.S. companies.)

10. Morningstar Invests $30M in TAMP SMArtX

SMArtX Advisory Solutions, architect of the SMArtX turnkey asset management platform, announced in May that it closed on a Series D funding round with a $30 million investment by Morningstar Investment Management, a subsidiary of independent investment research provider Morningstar.

The announcement followed a press release in November reporting that SMArtX would power the Morningstar TAMP.

The Morningstar capital was to assist in the build out of SMArtX’s development capabilities, including those that will support Morningstar Investment Management’s existing TAMP and its direct indexing solution launching later this year, according to the firms.

SMArtX has been hosting direct indexing strategies for over four years and offers one of the largest direct indexing platforms in the industry with 133 strategies. It had client assets of about $19 billion, according to Echelon.

9. Kennedy Lewis Invests $175M in Sanctuary Wealth

RIA Sanctuary Wealth parent company Azimut Group said May 31 that Sanctuary closed on a $175 million investment from credit manager Kennedy Lewis Investment Management.

The funds were to be used to fuel Sanctuary’s M&A strategy and the organic growth of its partner firms, including enhancing the company’s technology solutions and talent management initiatives, Sanctuary and Kennedy Lewis said in a joint announcement July 13.

Launched in 2018, Sanctuary has accelerated its expansion in the last year, during which it has onboarded 20 new advisor teams from across the U.S., taking assets under advisement to about $25 billion, it said.

8. UBS Acquires Wealthfront

UBS Group said in January that it agreed to buy U.S. robo adviser Wealthfront for $1.4 billion in cash, the first major acquisition of a fintech company under UBS CEO Ralph Hamers.

The deal was to add more than $27 billion in AUM and over 470,000 clients in the U.S., Switzerland’s largest bank said.

7. Advisor Group Buys Infinex Financial

Advisor Group said in May it was buying Infinex Financial, a BD that had some 750 financial professionals working with about $30 billion in client assets and roughly 230 community-based bank and credit union programs nationwide.

“This acquisition aligns Advisor Group with one of the most widely respected firms specializing in helping financial institutions build and grow successful wealth management programs across the country,” Jamie Price, Advisor Group CEO and president, said at the time.

6. Advisor Group Buys American Portfolios

Advisor Group announced in June it was acquiring American Portfolios Financial Services, an independent BD with some 850 financial professionals working with $40 billion in client assets.

Headquartered in Holbrook, New York, American Portfolios is led by Lon Dolber, who planned to remain the firm’s chairman, CEO and president, and to join Advisor Group as vice chairman.

5. Bain Capital Takes Stake in IIFL Wealth Management

Investment firm Bain Capital announced March 31 that it agreed to acquire a 24.98% equity stake in IIFL Wealth Management, an RIA that Bain called “one of the largest and fastest growing wealth and asset management firms in India,” from General Atlantic Singapore Fund and FIH Mauritius Investments, a wholly owned subsidiary of Fairfax India Holdings Corporation.

IIFL had about $44 billion in client assets as of Dec. 31, according to Bain.

4. Genstar Capital Leads Recapitalization of Cerity Partners

RIA Cerity Partners and private equity firm Genstar Capital jointly announced in June that Genstar was leading a recapitalization of Cerity.

Lightyear Capital has been an investor in Cerity since 2017 and continues to be an investor in the firm.

Cerity has a footprint in 16 markets across the U.S., with 425 professionals serving over 10,000 clients and advising on about $50 billion in assets.

The RIA provides estate, financial and tax planning, tax preparation, executive financial counseling, retirement plan advisory, and investment management services to high-net-worth individuals and their families, businesses and their leaders, and nonprofit organizations.

3. Morgan Stanley Acquires Cook Street Consulting

Morgan Stanley said in February it was acquiring RIA Cook Street Consulting, which advises on about $72 billion of client assets and provides consulting services to retirement plan sponsors, corporate accounts, foundations and endowments.

2. World Insurance Associates Acquires Pensionmark Financial

World Insurance Associates said March 16 that it entered into an agreement to buy Pensionmark Financial Group, a retirement and financial planning-focused RIA supporting more than $80 billion in assets across its network.

The transaction included Pensionmark’s Advisor Support Platform, the Pensionmark Financial Group RIA and the Pensionmark Securities broker-dealer. For over 30 years, Pensionmark has been serving its employer and individual investor clients via its network of more than 300 retirement plan specialists, financial advisors and staffers.

Headquartered in Santa Barbara, California, Pensionmark has more than 65 locations in the U.S.

1. Captrust Acquires Portfolio Evaluations

Captrust Financial Advisors said in January that it completed its acquisition of Portfolio Evaluations Inc., which had $107 billion in assets under advisement.

Based in Warren, New Jersey, PEI helps direct, advise and educate fiduciaries of institutional investment programs, including retirement plans and family office groups. It opened its doors in 1992 and is led by co-founders and partners Attila Toth, Michael Sasso and Rich Torbinski.

The Captrust-PEI deal closed in late 2021 but wasn’t announced until Jan. 14. PEI was the 54th firm to join Captrust since 2006.