Under the terms of the transaction, SEI will pay about $527 million for the equity in a newly-formed entity that is buying the Stratos business, with options that mean that the entire operation can be built in future.

Nasdaq-listed SEI, which provides investment processing and management, and investment operations solutions, has made a “strategic” investment in Stratos Wealth Holdings. 

Stratos, based in Beachwood, Ohio, is a family of companies including affiliated registered investment advisors, operating in 26 states of the US and comprising more than 360 advisors.

SEI, which announced the move in a statement late last week, is also due to issue second-quarter financial results later today. 

Family Wealth Report may update this report with more details about the rationale of the Stratos move.

The transaction shows how firms eye wealth management as a sector ripe for consolidation – and growth. The US is going through a multi-trillion-dollar transfer of wealth to younger cohorts, raising the need for RIAs and other firms to invest in systems and talent.

A newly-formed entity will buy the operating entities comprising the Stratos business, SEI said. 

SEI will pay about $527 million for 57.5 per cent of the equity of this entity. Certain legacy Stratos equity holders will continue to own 42.5 per cent, which is subject to put/call rights that, if fully exercised, will result in SEI owning the entire entity. As part of the deal, Emigrant Partners will exit its investment in Stratos at closing.

Stratos’s founder and CEO Jeff Concepcion will continue to lead that business, which will operate under its brand and as an affiliated business of SEI. Stratos’ existing business and client service model, including custodial relationships, will continue, SEI said.

“SEI’s robust set of solutions and services will enhance our ability to operate at scale, while delivering advisors a highly personalized level of service,” Concepcion said. 

“We have worked closely with SEI for 15 years, and we appreciate their shared commitment to consistently delivering value to our advisors,” he continued. “SEI’s breadth of capabilities and its connections across the industry can significantly enhance and advance the services we deliver to make doing business and serving clients more seamless for advisors.”

A strategic investment
Ryan Hicke, CEO of SEI, said: “We’re making a strategic investment that reinforces our unwavering belief in financial advisors and their delivery of advice, and Stratos brings an intimate understanding of what adds value to an advisor’s business. Their approach to coaching, building sustainable value, and focusing on client acquisition and service can help advisors scale their businesses, drive more organic growth, and address the industry’s most prevalent challenges.”

“This partnership enables us to help accelerate growth for advisors and wealth managers, solve succession and business transition challenges, and develop the next generation of professionals delivering advice,” Hicke said.

Subject to applicable regulatory approval and other customary closing conditions, the transaction is expected to close in two stages: The US-based Stratos business, making up about 80 per cent of the transaction value, is expected to close in the second half of 2025. The Mexico-based NSC business is expected to close in the first half of 2026. 

Goldman Sachs served as financial advisor, and Alston & Bird served as legal counsel to Stratos. Wells Fargo served as financial advisor to SEI, and Holland & Knight served as legal counsel to SEI. 

This is already proving to be a busy week for M&A. SS&C Technologies is to buy Calastone, the global funds network and technology solutions provider to the wealth and asset management industry.