Advisor Group to be Sold to Reverence in $2.3 Billion Deal
Reverence Capital Partners, a private equity firm focused on investing in financial services businesses, has agreed to acquire a 75 percent stake in Advisor Group Inc. from Lightyear Capital, PSP Investments and other shareholders.
Reverence Capital Partners, a private equity firm focused on investing in financial services businesses, has agreed to acquire a 75 percent stake in Advisor Group Inc. from Lightyear Capital, PSP Investments and other shareholders, which will retain the remaining 25 percent. The transaction is expected to close during the third quarter.
While financial terms were not disclosed, Investment News reported a sale price of approximately $2.3 billion, citing anonymous sources close to the matter.
Advisor Group, one of the nation’s largest networks of independent financial advisors with more than 7,000 financial advisors, will continue to operate as an independent and privately-held company. Its four member firms include FSC Securities Corporation, Royal Alliance Associates, SagePoint Financial, and Woodbury Financial Services.
Jamie Price will continue to serve as chief executive officer of Advisor Group, leading the existing management team for the company as well as continuing to serve on its board, along with representatives from Lightyear Capital, PSP Investments and other members to be selected by Reverence Capital Partners in the coming weeks.
Valerie Brown, currently executive chairman, will retire from her executive position, but will remain an investor in the company.
As part of the transaction, Advisor Group and Reverence Capital plan to establish an advisor recognition and retention program, with details to be announced between signing and close.
“We are in the early innings of the fiduciary era, we have a nice lead and we plan on winning,” said Jamie Price, president and CEO of Advisor Group. “And winning in our book is our ability to continue to make significant investments in our business to give our advisors the technology, service and products they need to serve their clients in this fiduciary era and position their businesses for long-term success and growth.”
Lightyear Capital LLC and PSP Investments purchased Advisor Group from American International Group Inc. (NYSE: AIG) in 2016, and since that time, the company has grown to more than 7,000 financial advisors, up from 5,200 advisors at the time of acquisition.
The company noted that its growth stems from “strong recruiting,” as well as several strategic acquisitions and recruiting deals, including Capital One Investing, Signator Investors and Questar Capital.
Client assets under administration are currently $268 billion, up $78 billion from $190 billion at year-end 2017, and assets under management increased 30 percent during the same period.
Reverence Capital Partners is a private investment firm focused on investing in global, middle-market financial services businesses through investments in five sectors that include depositories and finance companies, asset and wealth management, insurance, capital markets and financial technology/payments. The firm was founded in 2013 by Milton Berlinski, Peter Aberg and Alex Chulack.
