'Ninja buyers' dominating RIA deals
August 24, 2016 1:42 PM
RIA M&A mid-year review
A major M&A trend in the RIA market appears to be on the wane — breakaway brokers are accounting for fewer transactions as fewer brokers leave wirehouse to go independent.
Nonetheless, RIA mergers and acquisitions through June 30 are on pace to sustain last year's record 130 deals, according to DeVoe & Co.'s RIA Deal Book mid-year review. What's more, the average AUM for sellers soared past $1 billion this year — a 54% increase in three years.
What's driving the hot market? "Value and scale," says David DeVoe, managing partner of the San Francisco-based consulting and research firm. "Size is becoming more important."
Click through to see how the RIA M&A market is faring.
Read more:Why fewer breakaway brokers are joining RIAs
Nonetheless, RIA mergers and acquisitions through June 30 are on pace to sustain last year's record 130 deals, according to DeVoe & Co.'s RIA Deal Book mid-year review. What's more, the average AUM for sellers soared past $1 billion this year — a 54% increase in three years.
What's driving the hot market? "Value and scale," says David DeVoe, managing partner of the San Francisco-based consulting and research firm. "Size is becoming more important."
Click through to see how the RIA M&A market is faring.
Read more:
New record for 2016?
Through mid-year, transactions are on pace to break 2015's record-breaking activity, as evolving acquisition models and new entrants spur merger activity.
Sellers Beware!
"They're going up against some ninja buyers," cautions DeVoe.
Fewer wirehouse refugees are becoming RIAs
After the financial crisis, wirehouses made a series of seven-year forgivable loan deals with top brokers. When the term ended, many brokers rushed to RIAs. But that wave has now subsided.
Sellers' average AUM has jumped 54% in 3 years
The increase reflects RIA growth and "the appetite of deep-pocketed acquirers" who want greater scale, according to the mid-year review.
HighTower and Focus are funding spending sprees
Focus, a leading RIA aggregator, and HighTower, a leading acquirer, are providing capital to help partner firms grow by buying smaller RIAs.
Read more:What's next for Focus Financial?
Read more:
Advisory firms like to merge with each other, or sell to a consolidator
Banks remain selective buyers of RIAs, but interest from private equity firms is increasing.
