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PE Firm Picks Up Advisor Group

Industry Trends and Research

Private equity firm Reverence Capital Partners has announced that affiliated investment funds have signed a definitive agreement to acquire Advisor Group, Inc.

Headquartered in Phoenix, Arizona, Advisor Group, Inc. is one of the nation’s largest networks of independent financial advisors serving over 7,000 advisors and overseeing $268 billion in client assets, up $78 billion from $190 billion at year-end 2017 and AUM increased 30% in that same period. Advisor Group had some 5,200 advisors at the time of its acquisition by Lightyear Capital and PSP Investments in 2016.

According to a press release, it will remain “business as usual for financial advisors and employees with this new ownership structure”, with Advisor Group continuing to operate as an independent and privately-held company, under the existing brands and organizational structure of the company and its four member firms: FSC Securities Corporation, Royal Alliance Associates, Inc., SagePoint Financial, Inc., and Woodbury Financial Services, Inc.

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.” However, Valerie Brown, currently Executive Chairman, will retire from her executive position, though she will remain an investor in the company.

Under the terms of the transaction, Reverence Capital will purchase 75% of Advisor Group from its shareholders, with Lightyear Capital, PSP Investments and all other shareholders maintaining up to a 25% share. The transaction, which is subject to customary regulatory and other approvals, is projected to be completed during the third quarter. Financial terms were not disclosed, but Bloomberg reported earlier Thursday that the likely price was between $2.1 billion and $2.4 billion.

As part of the transaction, Advisor Group, in coordination with Reverence Capital, expects to establish an advisor recognition and retention program, with details to be announced between signing and close.

Reverence Capital Partners is a private investment firm “focused on thematic investing in leading global, middle-market Financial Services businesses through control and influence oriented investments in 5 sectors: (1) Depositories and Finance Companies, (2) Asset and Wealth Management, (3) Insurance, (4) Capital Markets and (5) Financial Technology/Payments.” The firm was founded in 2013, by Milton Berlinski, Peter Aberg and Alex Chulack, after careers advising and investing in a broad array of financial services businesses.