Make that one more emerging regional RIA powerhouse.
Less than two weeks after a Dealmakers Summit in Santa Monica highlighted the fast-growing number of RIAs striving to be regional powers, Boston-based Colony Group has expanded its footprint by acquiring Prosper Advisors, based in the wealthy New York suburb of Armonk, N.Y.
Successful firms following a regional acquisition strategy "have some common characteristics, says Michael Nathanson, chairman, CEO and president of Colony, a Focus Financial Partners firm. They have to have the infrastructure to focus resources on acquisitions without diminishing service to clients. They also have to have capital, credibility and some level of expertise and experience.
The deal, which closed last week, gives the 27-year-old Colony more than $3 billion in client assets, including Prosper's $300 million -- nearly double the assets Colony had when it joined Focus two years ago.
MORE DEALS AHEAD?
Expect Colony, which also has offices in New York and Naples, Fla., to pursue more deals in the future, says Nathanson.
Were disciplined buyers, he says. We have an advisor in Portland, Ore., and clients all over the country -- so while a deal doesnt have to be on the East Coast, it is logical that well be looking at major metropolitan areas if theres the right fit.
Colonys affiliation with Focus gives the firm a deal-making advantage, Nathanson says. In addition to financing deals and providing instant credibility, Focus also offers due diligence and legal expertise that helps Colony look under the hood of firms it is considering, he says.
Prosper president Dina Lee, a former managing director at the U.S. Trust and partner at Ernst & Young who founded the firm in 2002, called Colony a natural fit for both Prosper and its clients. Prosper will be re-branded under the Colony name, but Lee will stay on as president of the firms family office and managing director of its offices in Armonk and Manhattan.
ADVISOR CAREER STRATEGY
One advantage for Colony is its focus on transitioning advisors on a career path to equity partnership, Nathanson contends.
We offer people a clear path towards professional fulfillment and advancement, ultimately ending in equity ownership and partnership, Nathanson says.
When we talk to potential merger partners we find we solve a problem they have when they cant offer advisors a path to ownership. We have very specific criteria that, if followed, can advance people toward being owners," he points out. "We believe that compact is a differentiation and enables us to attract the best people in the business.
Colony has also appointed Joseph Salvati as senior vice president in charge of the firms Florida offices, and hired Jack Clark as senior associate financial counselor in its Naples office.
- Powerhouse Regional RIAs Rising, Say Dealmakers
- Advisor M&A: 4 Hot-Button Issues
- How to Create Top Advisors
- Focus CEO: National RIA a 'Foolish' Idea