M and A

Midsummer Heatwave Of M&A Deals

Charles Paikert US Correspondent July 6, 2023

Midsummer Heatwave Of M&A Deals

This is the height of summer, the US has marked Independence Day and people are prepping for vacation season, but M&A deals in the wealth management space are coming in fast. A period of rising rates had chilled some activity, but it appears appetite at a more structural level remains strong. Our US correspondent looks at three deals.

Midsummer signs that the RIA M&A market is alive and well: three major deals in one day from Mercer Global Advisors, Cerity Partners and Robertson Stephens respectively that exemplify three segments of the market.

Serial acquirer Mercer, one of the most active buyers in the industry, has acquired Day & Ennis, a $400 million RIA based in Macon, Georgia. (See a separate story on that deal)  Cerity, a buyer that has raised its profile significantly over the past two years, bought AJ Wealth, a New York City firm with over $2 billion in assets under management. 

And Robertson Stephens Wealth Management, an RIA better known for its Silicon Valley investment banking arm, snapped up Haymarket Wealth Management, a Madison, New Jersey advisory firm with approximately $285 million in AuM.

Mercer’s machinations
Mercer has completed nearly 80 deals since entering the M&A market just seven years ago. The Day & Ennis acquisition is its fourth this year, and Dave Barton, Mercer’s vice chair and head of M&A, hopes to complete as many as a dozen more deals by year’s end.

Mercer was also among the first RIAs to accept substantial capital backing from private equity firms, which now own nearly 80 per cent of the company. Genstar Capital was an original backer, joined by Oak Hill Capital in 2019. Canadian PE firm Atlas Partners came aboard earlier this year with a roughly equal ownership position.

Active Cerity
Cerity, which is also backed by Genstar, is among the busiest RIA buyers this year, completing six deals to date, five of which involved firms with at least $1.8 billion in assets. Genstar bought a controlling stake in the RIA from Lightyear Capital last year, and is expected to encourage continued aggressive M&A deal making. 

Cerity was founded by Kurt Miscinski in 2009, after securing a seed investment from billionaire Howard Millstein, whose New York Private Bank & Trust owns Emigrant Partners, one of the industry’s biggest minority investors in RIAs.

Robertson Stephen coming on strong
Robertson Stephens has been under the radar, but over the last six years, Raj Bhattacharyya, CEO of the company’s wealth management arm, has grown the division from two advisory teams to over 17 teams currently managing over $4 billion. 

Haymarket's founder, Tom Hagerstrom, who previously worked at Bear Stearns, JP Morgan and Guggenheim Partners, will join Robertson Stephens as a managing director and principal. With the addition of Haymarket, Robertson Stephens has four offices in the northeast and three in the New York metropolitan area.

The firm will continue to look for M&A opportunities nationally, Bhattacharyya told Family Wealth Report. 

“The M&A market is still competitive since the underlying reasons for merger remain strong,” Bhattacharyya said. “However, buyers have become more selective, and are typically buying firms that are truly accretive in the current environment, usually because they either bring a new capability or are very aligned in their client value proposition. Culture, fit and approach to clients has become ever more important.”

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