Lightyear Capital, the private equity powerhouse that is buying AIG Advisor Group with PSP, the Canadian pension investment manager, is expanding its reach within the RIA market.
Wealth Enhancement Group, a $4.5 billion hybrid advisory firm bought by Lightyear last year, is set to acquire wealth management firm HHG & Company, with over $1 billion in assets under management.
The HHG acquisition extends WEG's footprint to the northeast and "marks another important step toward our ongoing goal of building a leading national wealth management and financial planning brand," said Jeff Dekko, the firm's president.
Minneapolis-based WEG, which is affiliated with LPL Financial, expanded into the Chicago market in 2013 and has 12 offices in Minnesota, Iowa and Illinois.
In addition to organic growth, WEG is on the lookout "for potential acquisition candidates that can fit seamlessly within the broader firm and can help us extend our strategy to new geographies," Dekko said.
Lightyear managing partner Mark Vassallo noted the "ongoing consolidation" in the RIA market.
Indeed, M&A activity in the RIA industry in 2015 hit an all-time high of 123 transactions in a single year, according to DeVoe & Co., the San Francisco-based consultancy and research firm.
Founded by former PaineWebber CEO Donald Marron, Lightyear, which sold the Cetera IBD network to RCS Capital for $1.15 billion three years ago, has a dozen financial services companies in its own portfolio.
Under the terms of the agreement to buy Darien, Conn.-based HHG, all of its existing personnel will remain with the firm. HHG will continue to be led by George Stapleton, who has been named regional president.
Joining WEG, Stapleton maintained, allows HHG to offer its clients "a significantly expanded value proposition – including advanced investment management and planning recommendations, as well as sophisticated back-office capabilities – without diluting the level of service we already provide."
Financial terms of the transaction were not disclosed and the transaction is expected to close in the second quarter of 2016.
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