Sanctuary Wealth Partners acquired a $550 million firm which specializes in money management and model portfolios, adding to a record year for RIA M&A.
Winthrop Capital Management is an employee-owned firm founded by CIO Greg Hahn in 2007. The RIA offers multiple income-oriented strategies and a proprietary asset allocation tool, Hahn says.
“We work primarily with institutional investors, like foundations, endowments, insurance companies, investment advisors,” Hahn says. “We’re not your typical wrap accounts platform. We’re a boutique money management firm, working with a small group of financial advisors on very focused strategies.”
The Indianapolis-based firm listed fewer than 25 clients in the last fiscal year and seven employees on its latest Form ADV filed in March.
Also based in Indianapolis, Sanctuary Wealth Partners is a division of the 110-year old Noyes Group. Noyes manages just under $2 billion in total assets — including $1.3 billion in AUM — according to its latest Form ADV filed in August. In addition to its private wealth division, Noyes is comprised of Sanctuary Securities and Sanctuary Advisors, according to a company release.
The merger reflects what’s happening locally in Indiana and more generally in the Midwest, Hahn says. “So much of the industry is being rolled up into a bank and broker model to go out and sell product — investment solutions as products,” he says. “We think investment solutions should be investment solutions and utilize skill to help solve those issues. A lot of those firms doing that have merged, been acquired or just went away.”
For Hahn, the recent industry trend toward commissions made the move more enticing. “We made the decision that developing partnerships with other financial advisory firms was going to be a more stable and sustained way to find growth.”
Winthrop’s asset allocation platform, called Wombat, is used by other large institutions like Merrill Lynch and Oppenheimer, he says. “Our competitive advantage is our modeling software,” Hahn says. “It helps support the existing book of business. We have our own way of looking at assets, so we can’t use someone else’s tools.”
Marketing was also a consideration for the boutique firm. “Investment firms spend a lot of money on marketing dollars and the question becomes what your return on investing dollars will be,” Hahn says. “We don’t have that kind of a budget, so leveraging relationships like this gives us a little more power in terms of distribution.”
Hahn will take over as CIO of the Noyes Group and will lead a newly formed investment solutions division for Sanctuary Wealth. Winthrop will retain its own branding and company structure, he says.
While Raymond James and Stifel are on hiring sprees, Wells Fargo is still losing talent.
The M&A market
The increased M&A activity is due in part to a notable 2017 for RIAs.
“The beauty of this is we get to work with a firm with really solid bones,” Hahn says, “and build around it.”
Hahn started his career with 40/86 Advisors in Carmel, Indiana in 1999 before landing at Fahnestock Asset Management in 2005, per FINRA BrokerCheck records. Before founding Winthrop, he was briefly registered with Oppenheimer in 2007, per BrokerCheck.
