A family office and private bank-backed investor in registered investment advisory firms hired one of the industry's leading dealmakers for a new dual role.
Emigrant Bank — which is owned by the Milstein family's New York Private Bank & Trust — and Emigrant Partners, a subsidiary that makes minority nonvoting investments into wealth and asset management businesses, appointed Liz Nesvold a vice chair of the bank and chair of the subsidiary, the firms
Nesvold has come to know both firms over her decades in the industry as a pioneer investment banker who co-founded that industry's first specialist wealth management M&A practice in 1991 at Berkshire Capital. In 2007, she and business partners launched their own RIA investment bank, Silver Lane Advisors,
"We thank Liz for her contributions to Cresset and wish her success in her next chapter," representatives for Cresset said in a statement.
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Emigrant Bank Vice Chair John Hart, who leads the private trust companies, and Emigrant CEO Jenny Souza report to Nesvold in her new assignment.
"My relationship with Liz dates back some 25 years, having been recruited by her into investment banking straight out of college," Souza said in a statement. "I am thrilled to have the opportunity to work closely with Liz again, and to leverage the depth of her industry expertise and reach, which are second to none, to the benefit of the EP team and our network of partner firms."
In the below interview with Financial Planning Chief Correspondent Tobias Salinger, Nesvold didn't provide many specifics about the prior stops in her career. She did, however, explain how she'll be spending her time at the bank and the investment firm, which has invested over $530 million into wealth and asset management firms over 17 years. Its current group of 20 have more than $100 billion in combined client holdings, with total revenue of more than $400 million and earnings above $150 million.
The following conversation with FP has been lightly edited for length and clarity.
Financial Planning: You left Raymond James for Cresset. And now you're with Emigrant Bank and Emigrant Partners. What led to those changes, and what made Emigrant the best fit for your next gig?
Liz Nesvold: That's a good question. That's a tough question. My No. 2, Katie [Fauntleroy] and I, we worked extraordinarily hard on a lot of things at Cresset that were impactful for the organization, because if you look at that business, that business had grown very quickly over a number of years. And so from my lens, what a fantastic moment to step in and put my fingerprints on the business.
And obviously, I have known a number of the people there going into that role. It really was a difficult decision to pivot. I mean, there's a little part of my heart that's there. There are hundreds of people that I just adore. So it was not without a lot of contemplation. But the opportunity to do something that was incredibly white-boarded for me, meaning the opportunity to step in and figure out how to impact the industry in a meaningful way, was too difficult to pass up. It's a rarity to be in a role for 10 months and then pivot, but this was a long time in the making, for sure.
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FP: What led you to choose Emigrant as your next destination?
LN: It really is this mystery business. It is a family office that owns a bank and has invested in a whole host of other businesses, smartly. But I've known Howard [Milstein] and his dear partner, Barry Friedberg, for at least a decade. And every time we did some work together, Howard would say, 'When are you going to come join us, Liz?' And I said, 'What would I do?' And he said, 'You would have fun and make money.' That was the pitch to me for years and years. And so, you know, it got to the point where he was more proactive.
Then you throw in the mix Jenny [Souza], whom I've known since her first moments in the professional landscape. It was quite a tag team to me. It is an extraordinary opportunity to be dual-hatted. And the two hats are, one, doing something that I'm passionate about and I have always done, which is consulting to wonderful firms as they're thinking about continuity, planning, M&A, but this time with a checkbook. We have capital resources at Emigrant Partners. And the other part of the role is to help think holistically about everything that we have at Emigrant and how we can elevate the offering and get in front of more actual clients and figure out a way to cross-pollinate with these wonderful partner firms on the EP side.
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FP: What factors determine whether a minority-stake investment from a firm like Emigrant Partners may be a better option for an RIA than selling a majority stake?
LN: There are many more players who will do majority stakes. Often they come in the private equity wrapper, and for some that's going to be the right outcome. But the firms that have leaned into EP tend to be independent and in some cases fiercely independent and want to control their destinies.
Some may or may not be comfortable with M&A. It is not a requirement that you have to be a hyper-grower by virtue of M&A. It's a partnership that is really trying to think through that continuity and succession planning. That is the perfect type of candidate for this platform. It is not passive capital. It is strategic, long-duration capital. So, from the advantage of having expertise across — you probably have taken a look at the leadership on the EP side — there is tremendous expertise across deals, structuring, capital sourcing, succession planning, branding, marketing, you know, even interacting with the media. And it's just an opportunity for a big wrapper without disruption to the business model.
Some will find that highly valuable, and others may want to just either do the great strategic transaction, or do a majority sale to private equity. And that's okay, too. A neat thing is that there are more choices today than ever before for partnership, both strategic and passive. And then obviously, capital, there's plenty of capital in the marketplace. We have a history on the EP side of providing excellence for 17 years, and I'm not sure that there are many with that kind of track record for and on behalf of the industry.
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FP: How has wealth management M&A changed since you first started working on it and since you launched Silver Lane?
LN: As a baby banker stepping into this space, it was usually a trust company or bank that was acquiring an investment counselor. More often than not, it was about geographic expansion or service additions. And rarely was it one or two firms who were repeat or serial acquirers. So that was the early days.
At the time we launched Silver Lane, there were many more people starting to pay attention to the industry. You know, back in the early days, to talk about investment counseling or personal advisory or broker-dealer — nobody's a broker anymore, it's all wealth management. But nowadays, it's on the top of everybody's wish list. It has become the darling of the industry. And I could not have known that at the time we launched Silver Lane. I don't know if it's Yogi Berra, who said, 'Better to be lucky than smart,' but I like to think I was a little bit of both when I launched Silver Lane. But even then, we were just starting to see the pickup in transactions. It was still a cottage industry, very fragmented.
Fast forward, now we're 17 years from the launch of Silver Lane, and it is still an industry where you can make an impact. Nobody "controls" the purse strings. There's still a lot of opportunity, and that's what makes it exciting. But the pace of activity has certainly come along. Even so, every year there are more new RIAs. What kind of industry has this? We're still so early in the consolidation phase that it feels like there's a lot more opportunity to come, which, of course, propels capital and new launches of businesses. So it's quite a frenetic pace of everything right now, which probably keeps you very busy.
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FP: That it does. What else should financial advisors know about Emigrant?
LN: We're probably the best-kept secret in multifamily co-investing. We feel so under the radar at the family office and bank level and, again, hope to elevate the opportunities and the platform and the services we provide. But I would say for folks who are thinking about the next evolution of their business and want to continue to control their own destinies, we are a place of choice.
