Financial Partners Fund, The Stephens Group and private investor Eric Schwartz led the investor side of the transaction, the company said in a statement. For Jefferson National’s part, CEO Mitchell H. Caplan led the executive team, which now owns a 10% share of Jefferson National.
The proceeds will be used in areas that RIA services company Jefferson National anticipates will translate into growth. High-net-worth investors are a fast-growing demographic in the financial services industry; RIAs and fee-based financial advisors represent the fastest-growing distribution channel for its products; and advisors and investors are increasingly hungry for superior value products and services.
In 2011, the Louisville, Ky.-based company posted sales of almost $300 million from the Monument Advisor, its flat-fee variable annuity product, Laurence Greenberg, president of Jefferson National said in an interview. That watermark makes Monument Advisor one of the 20 best-selling variable annuities in the industry, Greenberg said. The firm also surpassed $1 billion in total sales last year, owing to its selling relationships with 1,500 fee-based advisors in its distribution network.
“We plan, with the additional capital, to continue on that growth path,” Greenberg said. “We are looking at a 50% growth rate through 2012. We expect … to have over $1 billion a year in sales, and an advisor base that will number in the thousands.”
Financial Partners Fund is a unit of Citi Capital Advisors, and The Stephens Group is a family office that invests in private and public companies. Eric Schwartz is a former partner and management committee member at Goldman Sachs. Now, Schwartz leads a family office.
“As we look into the future, we would expect management to continue to buy into the company,” Greenberg said.
Donna Mitchell writes for Financial Planning.