After taking a year off from M&A, one of the best known RIA aggregators plans to leverage its incoming private equity infusion toward a more constant flow of deals.
On April 23, Mariner Wealth Advisors announced an agreement to sell a minority stake to Leonard Green & Partners. The Overland Park, Kansas-based firm is following rival RIAs
This is the first PE infusion for Mariner and the buyer’s first foray into wealth management, according to Carolyn Armitage, managing director of investment bank and consultant Echelon Partners. The parties didn’t disclose terms of the deal, which is expected to close June 30.
Despite striking 24 M&A deals since 2012 — a dozen of them in 2019 — Mariner abstained last year as the firm engaged in talks with some 12 suitors over a six-month period in consultation with Ardea Partners, Mariner CEO Marty Bicknell said in an interview. The firm also teamed up last year with Dynasty Financial Partners to
“This gives us the opportunity to keep things at a steady state and not have to sit back a little bit and build up the coffers again,” he says. “The pace of firms looking to come to market and looking to partner is just accelerating, and I frankly expect that to continue for the next three to five years.”
Representatives for Leonard Green declined to comment on the deal. The 32-year-old Los Angeles-based firm has invested in more than 100 service-provider companies in fields such as health care and retail while raising over $40 billion,
Bicknell isn’t selling any of his equity in Mariner under the deal nor pulling back from any of his duties with the firm. In the deal with Dynasty last year, Bicknell and his family’s private investment company, 1248 Holdings, became investors in Dynasty alongside Envestnet. Mariner’s RIA platform has attracted five teams since opening last year. The firm’s main line of business, its RIA consolidator, spans more than 700 employees, including 350 advisors managing $40 billion in assets under advisement.
The three PE deals by competitors and the Dynasty transaction were part of 26 minority-stake deals in wealth management in 2020,
She compares Mariner’s deal with Creative Planning’s
The potential downsides of selling a minority stake resemble those of selling a majority one, Armitage continues. Either move could undervalue the selling firm, or the sellers may not fully grasp the implications of the deal on their overarching strategic decisions, she notes.
Leonard Green will gain representation on Mariner’s board through its deal with Mariner. Bicknell says the buyer’s strategy and culture are good fits with Mariner’s. The firm is already “actively engaged” in 12 potential deals and expects to make four to six of them by July, Bicknell says. The firm’s acquisition targets in the past have ranged from $300 million to $2 billion in assets under management, and the deal enables Mariner to consider even larger deals.
“It gives us the ability to continue to do significant numbers of them on an annual basis,” Bicknell says. “It's really a talent acquisition strategy. We're not out trying to acquire AUM for AUM's sake.”
