A registered investment advisor spun off from a giant accounting firm earlier this year agreed to acquire a billion-dollar practice with 13 financial advisors in its first deal as a standalone firm.
Minneapolis-based Choreo is buying Enso Wealth Management, a California-based RIA with $1.8 billion in assets under management, in a deal at an undisclosed price that's expected to close by the end of the year, the firms
"We have very aggressive ambitions," Choreo CEO Larry Miles said in an interview, describing independent, fiduciary financial advisors as "really emerging from our infancy in many respects."
For Enso, which is based in Petaluma in the Bay Area with four other offices in California and one in Nevada, the decision to fold the partnership into a larger firm came down to questions of scale, technology and other infrastructure, according to co-founder Jim DeCota. He said that he and the 10 other members found that they were "working on the business too much rather than working in the business, which happens at our level." After the close of the deal and taking on Choreo's brand, the firm can focus more on its clients and its own recruiting and M&A.
"We believe that there are going to wind up being a handful of dominant firms that are shaping the future of the industry, and we want to be one of them," DeCota said.
Despite a slight dropoff in the volume of wealth management M&A transactions from the all-time high of 99 in the fourth quarter of 2021, the industry remains on pace to set a record for the 10th straight year,
The increasingly competitive fight among
The succession-minded practices primarily seek out "culturally aligned" buyers with the best fit for clients and employees, while growth-oriented firms are also trying to find "some level of autonomy" under the acquirer, Diamond said.
"They want really strong resources to free up their staff, their advisors and to have a more compelling value proposition for recruiting and acquisitions," he said. "Together they can build something that's much more valuable than if the firm was just running on its own."
Diamond described Parthenon as a "smart and sophisticated backer," given its current investment in
With Parthenon's capital, Choreo sees "a lot of firms out there" as prospective recruits as it works at the intersection of "wealth and estate and tax planning," Miles said. After spinning off from RSM, the company took its name from the word "choreograph" to denote how financial planning maps out a client's future like a dancer following a routine.
"We've been around for over 20 years," Miles said. "If there's such a thing as a 22-year-old firm just getting started, that's where we think we are."
