Carlyle Gives MAI More Fuel for Its M&A Push

Since 2017, Buoncore has closed 52 integrative acquisitions for MAI, which soon will experience its own ownership change. Carlyle, the global investment firm, is acquiring a majority stake in a deal expected to close this quarter.

MAI, serving corporate executives, professionals and entrepreneurs, in addition to athletes and entertainers, began as an affiliate of IMG International, a sports and entertainment agency founded by Mark McCormack (MAI stands for McCormack Advisors International).

In 2007, BC Investment partners, of which Buoncore was a founding partner, acquired MAI. It has grown from assets under management of $900 million to about $75 billion, including assets managed by its Evoke Advisors division.

Buoncore explains that the investment by Carlyle will provide more than capital. The firm's multi-faceted expertise, he says, can help create brand awareness of MAI in the consumer space.

Carlyle initially invested in the firm in 2021 through its investment in Galway Holdings, which acquired MAI that year and will become the majority owner upon closing.

Here are highlights of our conversation:

THINKADVISOR: What does Carlyle's acquisition of a majority stake in MAI do for MAI?

RICK BUONCORE: The capital they're bringing gives us plenty of dry powder to do all the great things we want to do for our clients and our business.

Carlyle's Global Portfolio Solutions Group provides all kinds of enhancements that, generally, firms like us aren't great at, such as AI and digital marketing. We're, kind of, still learning that.

Now that Carlyle is a controlling shareholder, they're going to provide that to us.

THINKADVISOR: What's the main objective?

BUONCORE: I think MAI is becoming a pretty well-known brand within the industry. Outside the industry, we're still a neophyte [at creating a brand].

That's the kind of thing Carlyle will help us do over time, not only with the capital they're bringing to invest in our company but more importantly, the expertise and history they have with portfolio companies and the capabilities they bring along with that.

THINKADVISOR: What changes are in store for your advisors?

BUONCORE: None. The advisors are uninterrupted, unaffected. Some of them might have an opportunity to liquidate 20% of what they own. But their day-to-day [responsibility] stays the same.

They could get more enhancements as we go forward, such as easier, better ways to use AI. For example, using a piece of software, called wealth.com, when working with a client's estate documents.

Instead of spending, maybe, four hours reading these, now they'll just spend about half an hour and only to make sure the references are correct.

THINKADVISOR: Is MAI's main clientele ultra-high-net-worth individuals?

BUONCORE: Fifty-six percent of our assets are in accounts of $25 million or more. So we've got a lot of smaller accounts as well.

We have a service model to take care of the mass affluent, one for high-net-worth folks and a model for ultra-high net worth. We also have a model for the family office. It's all a matter of what the client needs.

THINKADVISOR: Do you think there will be more industry consolidation?

BUONCORE: We're just at the beginning of it.

THINKADVISOR: What's your outlook for the market and the U.S. economy short term?

BUONCORE: Short term, I have no idea. It depends on what our president tweets today or tomorrow. The market has historically been an upward-driving market. So I think you have to believe stocks are a great investment opportunity.

We think we can create two kinds of alpha: traditional alpha, meaning outperform, and structural alpha [built-in mechanisms]; because of the scale of what we've created, we can get price discounts and better entry points for our clients than if they were on their own.

That's part of our getting-big strategy, though our goal isn't to get big. Our goal is to be the best firm in the industry and as a result, we'll get bigger. But on the client side, we want to remain an intimate boutique.

We were always an integrator from the very first acquisition: You convert to our platform — The One MAI Way. That's been our philosophy.

THINKADVISOR: Your company's origin is quite interesting. Please talk about it.

BUONCORE: Back in the day, Mark McCormack started IMG [International Management Group], the first agency in sports and entertainment. He had all kinds of celebrity clients. In the late '60s, he asked [golfer] Arnold Palmer if he could be his agent.

His goal was to make Arnold an enterprise. Soon Mark started to [take care of] his financial matters, like tax returns.

THINKADVISOR: That's where MAI came into the picture?

BUONCORE: MAI grew up as more of a service under the IMG model. MAI was there to help Mark's other clients too. When Mark passed away in 2004, his family kept MAI but sold IMG.

Within a few years I was given the opportunity to buy MAI; and in 2007, I bought it from the McCormack estate.

At that point, we had one office, 50 people [on staff] and $900 million. Today, we have about $74 billion and 40 offices around the country. We're at the end of the beginning. We have a long way to go.

THINKADVISOR: Does MAI still specialize in athletes and entertainers?

BUONCORE: Mark also had a lot of clients in the professions, like CEOs and other executives, entrepreneurs. Today, athletes represent less than 15% of our business, but it's a specialty of ours, for sure. We have about 500 or 600 prominent athletes, of whom 33 are Hall of Famers.

We continue to grow our [client list] of doctors and lawyers and entrepreneurs. We take care of entertainers too: It's called business management.

THINKADVISOR: What about MAI's work with family offices?

BUONCORE: We've been in the family office business for 50 years. We're trying to [retain] that advantage and are thinking of how to expand.

THINKADVISOR: Are you providing clients with anything that might be considered unusual for a wealth management company?

BUONCORE: You need to do something to help them live longer and enjoy it. So we've just instituted a wellness program, where we've partnered with Thrive Global, Arianna Huffington's wellness company.

On a regular basis, we give all their content — webinars, for instance — to our clients for them to learn about ways to live longer, but more importantly, to live better and enjoy life longer and not get dragged down by everything [that's gloomy] as they get older.