Page 24 - Investment Advisor October 2022

Cover Story

Among Schwab RIAs surveyed, just 6% staged a merger or • Reverence Capital Partners — the private-equity firm that
acquisition in 2021. The median size of assets added via such owns 75% of Advisor Group — took an unspecified equity stake
deals was $100 million for some 133 clients. in Signature Estate & Investment Advisors, a Los Angeles-
based RIA that manages over $16 billion in client assets. In
M&A Scene connection with the recapitalization, SEIA will work with the
Across the broader RIA arena and particularly among larger newly formed broker-dealer Signature Estate Securities.
firms, mergers and acquisitions (or inorganic growth) has been The deal should help enable SEIA advisors to offer RIA
happening at a rapid clip. It continued to be relatively strong and BD services to clients via a unified wealth management
in the first half of 2022, despite challenges that included stock platform and “will result in greater access to alternative
market volatility and ongoing inflation, according to DeVoe & investments, elevated client-facing technology, and more com-
Co. and Echelon Partners. “RIA M&A activity continues to be prehensive family office services,” the companies said in a
very robust, despite the environment,” DeVoe’s CEO recently statement in mid-August.
said in an interview. • RIA Sanctuary Wealth parent company Azimut Group
“Challenging global and national economies, a volatile stock said Sanctuary closed on a $175 million investment from credit
market, and interest rate increases typically lead to an M&A manager Kennedy Lewis Investment Management on May 31.
slowdown,” DeVoe noted. But “given the momentum of the The funds are being used to fuel Sanctuary’s M&A strategy and
activity year-to-date, the year will most likely exceed the 241 the organic growth of its partner firms, Sanctuary and Kennedy
transactions last year.” In fact, DeVoe expects 265 transactions Lewis said in a joint announcement July 13. Launched in 2018,
in 2022, though he thinks the “trajectory” of RIA M&A activity Sanctuary has accelerated its expansion in the last year, during
“will flatten” going forward. which it has onboarded 20 new advisor teams from across the
Based on deals in which the sellers were U.S. RIAs with over U.S., taking assets under advisement to about $25 billion, it said.
$100 million in assets under management, the top RIA M&A • RIA Cerity Partners and private equity firm Genstar
deal in the first half of this year was Penfund’s $75 million Capital jointly announced in June that Genstar was leading
investment in Mariner Wealth Advisors ($55 billion), DeVoe a recapitalization of Cerity. Lightyear Capital has been an
says. That deal was followed by Genstar Capital’s investment investor in Cerity since 2017 and continues to be an investor in
in Cerity Partners ($45 billion). the firm. Cerity works in 16 markets across the U.S., with 425
Total wealth management M&A activity declined for the sec- professionals serving over 10,000 clients and advising on about
ond straight quarter in Q2 this year, according to Echelon. “Still, $50 billion in assets.
the activity in the first half of the year remains elevated relative • Earlier this year, Captrust Financial Advisors said it com-
to historic trends and keeps 2022 on pace to be another record- pleted its 2021 acquisition of Portfolio Evaluations Inc., which
breaking year, barring a significant slowdown in deal activity in had $107 billion in assets under advisement. Based in Warren,
the second half,” the firm said in its Q2 RIA M&A Deal Report. New Jersey, PEI helps direct, advise and educate fiduciaries of
“Deal activity continues to be dominated by ‘Strategic & institutional investment programs, including retirement plans
Consolidator’ acquirers who announced 45.6% of wealth and family office groups. It opened its doors in 1992 and is led by
management transactions so far in 2022,” Echelon explained. co-founders and partners Attila Toth, Michael Sasso and Rich
“Capital remains available due to continued interest from both Torbinski. PEI was the 54th firm to join Captrust since 2006.
private equity and debt sources.” In addition, some of the larger RIAs and RIA aggregators
Here are some of the top RIA-related M&A deals of the past announced several more notable transactions over the past few
nine months: months, which are summarized below.

Creative Planning-Wipfli RIA
Creative Planning said it recently
acquired Milwaukee-based Wipfli
Financial Advisors — an RIA with
offices in nine U.S. states that manages
$5 billion in client assets — from
Wipfli LLP, a national tax, accounting
and consulting firm. Wipfli Financial

22 INVESTMENT ADVISOR OCTOBER 2022 | ThinkAdvisor.com