© 2019 SourceMedia. All rights reserved.

Why a $600M RIA spurned more than two dozen suitors to join Cresset

Beating out more than two dozen rival bidders, Chicago-based Cresset Asset Management has acquired Cypress Wealth Advisors, a San Francisco-based RIA with close to $600 million in AUM.

Nearly 30 companies approached Cypress with offers, says Barbara Young, the firm’s CEO.

“San Francisco is an extremely competitive market. [Cypress] was attractive to firms looking to establish an entry point in the area,” Young says. However, most of her suitors “had an exit plan,” she notes. “They were looking to build an empire, capitalize, then exit. That is anathema to me. I wanted to know my clients had a legacy.”

In addition to the fact that Cresset, which has around $3.3 billion in AUM according to its latest SEC Form ADV filing, is backed by long-term private capital with no plans to sell, Young says she was attracted to Cresset’s expertise in alternative investments, including hedge funds, real estate and venture capital projects. Cresset’s expertise in these fields was a selling point, she says.

Cresset's M&A deals 5/2/19

Founded in 2004, Cypress specializes in investments and tax and estate planning to facilitate wealth transfer, and serves 170 high-net-worth clients, according to the firm’s SEC Form ADV.

“We are not bound to Cresset’s investments, but have the opportunity to look at them independently and determine if they meet our clients’ needs,” says Young. “It widens the types of opportunities we can offer, in a universe we are very used to being in.”

The negotiations officially started nine months ago, though Young says she was first approached by Michael Cole, CEO of Cresset, about a year ago.

Cypress is Cresset’s second M&A deal this year. In March, the firm bought $500 million RIA Evanston Advisors, based outside of Chicago. That acquisition, in addition to Cypress, should push the RIA's AUM to around $4.4 billion.

Since its founding two years ago, Cresset has grown rapidly, establishing regional offices in Seattle, San Francisco, Minneapolis, Denver, and West Palm Beach. The firm is now looking to grow through acquisitions and the addition of Cypress will push its AUM to nearly $4 billion.

Cypress has only eight employees, all of whom will join Cresset. The acquisition expands Cresset to 110 employees, according to a spokesman.

For reprint and licensing requests for this article, click here.