Wealth-firm aggregator reaches across the Atlantic

Thomas Coyle

12 February 2008

New U.K. affiliate sees advantage being Focus Financial's gateway to Europe. New York-based Focus Financial Partners has made its first non-U.S. acquisition. The wealth-firm holding company says the addition of U.K.-based Greystone, its fifteenth acquisition in two years, deepens its expertise in alternatives and international investing and gives it a strong toehold in the Europe.

"Greystone is a terrific addition to our partnership as they share our values and are one of the leading firms in the U.K.," says Focus' CEO Ruediger Adolf.

The "values" Adolf refers to come down to a fiduciary and for the most part fee-based approach to managing high-net-worth assets.

Broad strokes

Focus targets high-growth wealth-management firms with at least $350 million in client assets that are run by experienced advisors who want the benefits of independence along with the scale and breadth of a large network. It generally acquires between 40% and 60% in its affiliates, which get a combination of cash and equity in the holding company.

Affiliates of Focus get help with marketing, compliance, human resources, and, where and when necessary, succession and sub-acquisition planning and financing. For the most part affiliates chart their own courses when it comes to investment products, execution and custody -- though where economies of scale can be brought to bear on its affiliates' behalf, Focus says it's ready to negotiate with vendors.

The idea is to create a network of highly profitable, own-brand fiduciary wealth-management firms that are jointly owned their individual management teams, Focus itself and -- eventually -- public investors.

Focus is backed to the tune of about $35 million by the Boston-based venture-capital firm Summit Partners.

Access point

Adding non-U.S. firms says always been part of Focus' plan, says Adolf. "But we wanted to be rock-solid in the U.S. in every aspect before we felt ready for this critical step."

As of early October last year, Focus' 14 affiliates accounted for about $25 billion in client assets. At its launch in January 2006, Focus said it hoped to reach the $25-billion mark by 2010.

Greystone, which has offices in Manchester and London, advises more than 5,000 mostly private clients on approximately $1.6 billion.

Focus sees additional acquisition opportunities in Europe as the independent wealth-management model becomes more appealing to investors there, says Adolf.

From Greystone's vantage point, the tie-in with Focus is "a great opportunity to further strengthen the Greystone financial-services and wealth-management offering, and there is a considerable attraction to being the access point to Europe," says its managing director Paul Heap. "The quality and professionalism of the Focus firms, and the resources and backing offered by Focus will allow us to expand our recruitment and acquisition programs." -FWR

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