Beacon Pointe acquires HNW RIA in its largest deal this year

One of the most active registered investment advisory firm acquirers made its biggest deal of the year so far, establishing its first location in New York City in the process.

Beacon Pointe Advisors purchased New York and Bridgehampton-based YorkBridge Wealth Partners, which will bring three financial advisors and three other employees managing more than $1 billion in client assets under founding RIA owners Carrie Gallaway and Andrew Stern to the buyer, the firms said April 17. The parties had completed the deal for an undisclosed amount two days earlier.

Gallaway and Stern each spent tenures of 15 years with wirehouses prior to launching their independent RIA with about $700 million in client assets in 2016, they noted in an interview. After passing the milestone of $1 billion in client assets last year, they reflected on the accomplishment by thinking about what it might take to get to $2 billion, or from there to $4 billion someday, Stern said. KKR-backed Beacon Pointe, which is based in Newport Beach, California, fit their needs as an advisory practice serving primarily high net worth clients.

"We've been quite fortunate to have been able to grow our business fairly substantially over the last several years," Stern said. "Scale really matters. We thought long and hard about the best approach for us to achieve our goals in growing the firm."

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With nine deals announced last year, Beacon Pointe tied RIA competitor Captrust and insurance brokerage HUB International for the sixth highest total in the industry, according to investment bank and consulting firm Echelon Partners. Only Mercer Advisors (20), Wealth Enhancement Group (14), Creative Planning (13), Mariner Wealth Advisors (12) and Merit Financial Advisors (11) unveiled more transactions. 

Dealmakers have begun seeing some impact from inflation and worries about a potential recession emanating in the larger economy, Captrust Senior Director Rush Benton said last week in a panel hosted by consulting firm Advisor Growth Strategies.

The pipeline has "changed a little bit with the decline in the financial markets last year and the increase in interest rates," Benton said. "I think private equity has gotten more nervous than they were, which means they have increased the scrutiny on properties that are being bought, and under what terms. And I think that, if I had to predict something for 2023, I would say that that trend will continue."

Beacon Pointe topped $26 billion in client assets under advisement with the acquisition of YorkBridge, which followed one other advisory team for the firm in the larger tri-state region.

"We are thrilled to formally represent Beacon Pointe in New York City and Long Island," Gallaway said in a statement. "We have recognized an expansive and growing need for comprehensive wealth planning services in the greater New York area."

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Publicly traded global investment firm and leveraged buyout pioneer KKR invested in Beacon Pointe in 2021, when the RIA acquirer had $20 billion in client assets and became the third firm of its kind that year to receive a valuation of at least $1 billion. Beacon Pointe retained more than 50% control of the firm's equity under the deal. That transaction also followed KKR exiting its prior investment in Focus Financial Partners. Clayton, Dubilier & Rice set the enterprise value of Focus at more than $7 billion in its deal earlier this year to take the firm private.