Fast-growing aggregator AMG Wealth Partners will buy a majority stake in myCIO, a large RIA with $7 billion in assets under management, according to both firms.
With myCIO, the five wealth management firms in AMG's portfolio together have $32 billion in AUM.
Formerly Ernst & Youngs Philadelphia investment advisory practice, myCIO provides financial planning to current and former C-level executives of 48 Standard & Poors and Fortune 500 Companies, according to its website.
Terms of the "permanent partnership" were not disclosed, according to an AMG statement.
As part of the transaction, myCIOs leadership team has agreed to long-term commitments with the firm, the statement says. Its members also will continue to hold a substantial portion of the equity of the business and direct its day-to-day operations, it adds.
None of myCIO's managing partners -- David Lees, James Biles and Paul Bracaglia -- were immediately available for interviews.
"Jim, Paul and I are excited by this opportunity to elevate our key next generation advisors to partners in the firm," Lees said in a statement. "We believe that AMG Wealth Partners will play an important role in supporting our growth and scale while further strengthening our ability to meet the current and future needs of our clients."
GROWING FIRM
AMG Wealth is a subsidiary of the global asset management company Affiliated Managers Group. The deal is the firm's fourth top RIA investment in the past four years.
AMG Wealth bought a controlling stake in Veritable, of Newtown, Penn., in 2012, followed the next year by a minority stake in Clarfeld Financial Advisors, of Tarrytown, N.Y., and a majority stake in Baker Street Advisors of San Francisco last year. AMG also has a stake in the Boston-based Welch & Forbes, purchased prior to the formation of its Wealth Partners division
NICHE APPEAL
"Each partner and prospective partner has a distinct firm, brand and offering," John Copeland, AMG Wealth's president says, "and we could not be more excited about what the future holds. "
Clarfeld serves a large number of wealthy expatriate clients, some out of its London office. Baker Street is known for its wealthy clientele in Silicon Valley. One of Veritable's selling points has always been its proprietary approach to investing for optimized after-tax results. Welch & Forbes, with a 175-year history serving "Boston's industrialists," maintains an extensive law practice managing trusts and estates.
Veritable and myCIO were previously owned by larger firms. The latter was formed after Ernst & Young decided to exit its investment and advisory business in 2005 in the wake of Sarbanes-Oxley legislation.
PROMISE OF INDEPENDENCE
Veritable founder Michael Stolper sold his company (then known as Stolper & Co.) to PNC Bank in 1994, and then purchased it back through a management buyout a decade later in 2004.
At the time of its acquisition, Stolper said part of the reason he and his team chose AMG was because they were persuaded the larger company was sincere in its promise to let them continue to run the company autonomously.
"Each of our affiliate firms is run by its management partners in an independent and autonomous way," Copeland says.
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