Top RIA Mercer Advisors has exchanged one private equity investor for another.
Genstar Capital purchased Lovell Minnick's seven-year-old stake in the Santa Barbara, Calif.-based RIA in what Mercer CEO David Barton characterized as a move that will help the RIA quadruple its clients and offices nationwide.
"Frankly, we have been looking for a private equity partner in substitution for Lovell Minnick for some time," Barton says. Genstar "has a very long track record of helping their companies grow. That was super important for the management team. We've got one of the fastest-growing RIAs in the country, but we really feel we are just scratching the surface of our potential."
Over the next five to seven years, Barton says he wants to see the number of his firm's offices grow from 15 to 40 nationwide, and his current client base rocket up from its current 4,300 to near 20,000. Mercer has about $6 billion in discretionary assets under management, according to an ADV form filed this week with the SEC.
Partnering with Genstar "will take us to from a national RIA to 'a store near you,'" Barton says, adding that his firm's "wheelhouse" client typically has at least $1 million to invest.
OTHER INVESTMENTS
Both private equity firms have other investments in the wealth management space. San Francisco-based Genstar also owns stakes in consulting firm AssetMark and alternative investment firm Altegris.
Lovell Minnick, which is based in El Segundo, Calif., and Radnor, Pa., owns stakes in wealth manager Kanaly Trust as well as the accounting-oriented advisory firm HD Vest.
Lovell Minnick specializes in "lower middle-market" investments in the financial services industry, the Genstar press release announcing the deal said, while Genstar focuses on the middle market.
"Genstar has a long history of supporting its portfolio companies and shares our belief in a client-centric culture and holistic service model," Barton said in the release. "Genstar's capital investment will allow us to further invest in growth, both organically and through acquisitions, and elevate the value proposition we offer our current and future clients.
The deal, the terms of which were not disclosed, is expected to close in the second quarter of 2015.
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