AssetMark's big TAMP move
AssetMark, the industry's third-largest turnkey asset management provider, hit the $50 billion mark by agreeing to buy Global Financial Private Capital, a $5.7 billion RIA that provides outsourcing services to around 200 advisors.
Although the TAMP business is dominated by Envestnet with over $500 billion advisor assets on its platform, AssetMark, headed by Charles Goldman, former head of Schwab Institutional and president of Fidelity's clearing and custody business, is making an aggressive push to catch number two SEI Advisor Network, which has around $65 billion in assets.
"Charles is a growth leader," says John Furey, principal and founder of Phoenix-based Advisor Growth Strategies who worked with Goldman at Schwab. "He's in the business of building and looking for accretive opportunities. Deals like this do not surprise me."
AssetMark was bought by China-based Huatai Securities two years ago for $780 million and has increased assets it administers by about 65% since then. Goldman became the firm's CEO in 2014 after Genworth Financial Wealth Management sold AssetMark to private equity firms Aquiline Capital partners and Genstar Capital for $412 million the previous year.
Goldman has focused on acquisitions, an infusion of capital, high-profile hires and a technology overhaul. Last year he made waves by bringing over Mukesh Mehta, a highly regarded technology executive who most recently was CIO for Cetera Financial Group. Mehta oversaw the installation of TD Ameritrade's open API Veo platform and previously worked for Goldman at Schwab Advisor Services as chief technology officer.
AssetMark's acquisition strategy "is working," says Mark Tibergien, chief executive officer of Pershing Advisor Solutions. "Buying other TAMP and proprietary investment management platform business is providing more scale and services for the advisors of the acquired platforms to grow their practices. AssetMark pioneered and has stayed true to the traditional TAMP, fully outsourced model, where they control the entire advisor and client experience.
"They have not tried like other TAMPs to be all things to all people," he continues. "Only SEI can compare, but SEI is more closed architecture. The advisors that fully embrace the outsourced model are very loyal."
David Canter, head of the RIA segment for Fidelity Clearing & Custody Solutions, agreed that this is a good time to be a TAMP.
"If you're in the TAMP business, you're in a great spot for three reasons," Canter says. "Advisors are looking for partners for solutions they can't provide in house; platforms have a great appeal and value and there's a desire to get as close as you can to the client, and this is a way to do that."
Global Financial, which began as an investment platform for smaller advisors who also sold insurance, has around 25,000 clients, according to the company's latest SEC Form ADV, does pension consulting work and focuses primarily on exchange-traded funds.
The firm says it provides advisors with technology, "strategic investment solutions, practice management guidance and business consulting services."
Furey, who has worked with Global in the past, describes the firm as a kind of "super-TAMP" that combines turnkey investment and technology services with "deep in the trenches" business development programs.
Global CEO Michael Bell was president and CEO of turnkey asset management provider Curian Capital from 2005 to 2014. Curian went out of business in 2015 and Bell teamed with a management team to buy an ownership stake in Global Financial in 2016.
Terms of the AssetMark deal were not disclosed.