The 2016 M&A market for RIAs is expected to bring more large deals, with acquisitive advisory firms, private equity and banks leading the way. "Advisory firms, consolidators and affiliates of consolidators are likely to be the most aggressive acquirers," says David DeVoe, who heads DeVoe & Co., a San Francisco-based M&A consulting firm. "I expect to see more acquisitions like Aspirants' acquisition of Hokanson Associates, where a large RIA is merged into an even bigger multi-billion dollar firm." Indeed, two large RIAs merged in the first week of 2016: Pathstone Family Office absorbed Federal Street Advisors to form a new wealth management powerhouse with nearly $6 billion in assets under management, Pathstone Federal Street.
Private equity firms are also expected to be active RIA buyers in 2016. “They see the average RIA growing at 15% plus in a minimally capital intensive business," says investment banker Elizabeth Nesvold, managing partner at New York-based Silver Lane Advisors.
And look for tech expertise to also spur deals.
"A key driver for M&A deals, especially at a regional level, is a need for new technology by acquiring firms," according to David Selig, CEO of Advice Dynamic Partners, a San Francisco-based consulting firm specializing in mergers and acquisitions.
Please click on the arrow above to see the deals that topped the market in 2015. Rankings and data provided by DeVoe & Co. Click
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Neal Simon, founder of Highline, was a buyer — until Bronfman made him an offer he couldn't refuse. Watch for Simon to look for acquisitions again — only this time with a lot more money.
Consolidator Captrust, led by industry veteran Rusty Benton, is aggressively seeking RIAs, with more targeted for 2016.
A private equity firm that likes advisory firms, Genstar added a major RIA to its holdings.
A well-respected San Francisco wealth manager known for high-end clients and fierce independence, Baker Street's sale to AMG took industry observers by surprise.
First Republic got the industry's attention by paying a premium for Luminous Wealth Management four years ago. Last year the bank snapped up another fast-rising wealth manager specializing in UHNW clients. More may be on the way.
Software star Orion got most of the attention in this transaction, but TA also acquired a top RIA performer in CLS.
AMG Wealth Partners, a well-capitalized division of global asset manager Affiliated Managers Group, had a busy year, adding two $6B-plus wealth managers to its impressive RIA roster. This is a buyer who isn't afraid to pull the trigger.
A pioneer robo-advisor acquired a national radio show and branch network in a single transaction. Robos may also be in play on the sell side in 2016.
This big-time acquisition by the private equity firm may auger more major PE deals to come in 2016.
Although Convergent, a subsidiary of City National, had a difficult year following the suicide of CEO Dave Zeir in late 2014, the wealth manager, with approximately $10B in AUM, was still a plum RIA asset for RBC. Expect banks to be big players this year as well.
