The Richmond, VA-based business continues a run of acquisitions, part of a larger theme in North American wealth management.

The subsidiary of Virginia-based Union Bank & Trust has agreed to acquire Outfitter Advisors, a registered investment advisor with about $400 million of client assets. The deal follows a similar transaction a few weeks ago and part of a wider M&A trend in the wealth sector.

Union Bank & Trust’s Old Dominion Capital Management business is making the acquisition. Outfitter Advisors is based out of McLean, Virginia and was founded in 1999.

Outfitter Advisors will operate as part of Old Dominion Capital Management with offices in Charlottesville, Alexandria and McLean, VA. The principals and employees will stay with the firm. The acquisition, which is subject to certain closing conditions and approvals, is scheduled to close during the third quarter.

“One of our goals for 2018 was to expand the reach and capabilities of our wealth management team by adding advisory talent in key markets. Outfitter Advisors based in the Northern Virginia-Metro DC market adds talented professionals that will complement our existing team at Old Dominion Capital Management,” Robert P. Martin, Union Wealth Management President for Union Bank & Trust, said.
Rising regulatory and other demands encourage the RIA to join forces with a larger group, Outfitter Advisors said.   

“It is the right time for us to become part of a larger organization,” Ben Peress, president of Outfitter Advisors, said.  “Regulatory support, investments in technology and client reporting and financial planning services will allow us to provide greater value to our clients.”

Union’s Wealth Management recently acquired Dixon, Hubard, Feinour & Brown. With these deals, the firm RIA assets will exceed $1.3 billion and total assets under advisement will be more than $3.6 billion.

The North American wealth industry has seen a number of RIA mergers and takeovers in recent months. For example in late March US-based Brown Advisory, an investment and strategic advisory firm, agreed to acquire with Austin-based RIA, Meritage Capital. Up in Canada, Fiera Capital agreed to acquire CGOV, an Ontario-based investment manager serving high net worth clients, for around $114 million.

A report in early March by Charles Schwab Advisor Services said the pace of mergers and acquisitions among US Registered Investment Advisor firms decelerated slightly in the second half of 2017 after beginning strongly, with a total of 94 transactions. There were 52 deals and 42 deals done in the first and second halves of 2017, respectively. A total of $106 billion of assets under management was acquired in these deals, with AuM sizes in the transactions ranging from as low as $50 million to as high as $17 billion, the brokerage and wealth management group said. The average deal size was $1.13 billion, down slightly from the level in 2016.

Strategic acquiring firms’ buying activity accounted for 40 per cent of deals done last year, up from 29 per cent a year earlier, and pointing to a consolidation trend. Private equity houses weren’t so busy in the RIA sector: they made up 11 per cent of the buyers in 2017, down from 20 per cent a year earlier.

RIAs have various reasons for buying and selling: in the former case, acquirers seek economies of scale as regulatory costs bite, to build out market coverage, and develop new revenues. Sellers, such as those nearing retirement, look for a way to exit a business, or desire to team up with a partner or larger firm to deal with costs and changing client needs.