Focus Financial adds another billion-dollar-plus RIA
Focus Financial Partners, a leading RIA aggregator, landed another major regional firm – its third deal since receiving a recent influx of private equity investment in April.
The New-York based company completed negotiations last week with the advisory firm Brownlie & Braden, a Dallas-based firm focusing on ultra-high net-worth clients.
The deal marks the eighth partner-firm deal for Focus this year.
Blue-chip equity firms Stone Point Capital and KKR acquired a 70% stake in Focus Financial only three months ago. The deal valued the aggregator at $2 billion, up from a valuation of $750 million four years ago.
The exact AUM for Brownlie & Braden was unavailable on their Form ADV. They registered as a newly formed adviser in 2017, meaning they expect to be eligible for SEC registration with the next 120 days. According to an affiliated spokeswoman, they’re currently refiling with the SEC.
However, filings from 2016 show the firm managed approximately $1.62 billion in assets at the end of 2015. A statement from a Focus spokesperson cites the current AUM at $2.3 billion.
Cofounder Smith Brownlie said the firm flirted with a number of prospective partners before landing with Focus Financial.
“We began our selective search process in 2012 and spoke with a wide variety of potential partners,” Brownlie said in a statement.
Brownlie said Focus emerged as the “ideal fit” given the company’s financial strength and capability for acquisitions. He also cited access to capital and value-added services as determining factors.
“We were looking for a strategic partner to help us continue to expand our firm,” Brownie said.
The terms of the deal were not disclosed.
DEALS COULD ACCELERATE
One of the industry's most aggressive consolidators, Focus now has 49 partnerships in the U.S., over an 11-year history and has no plans of slowing down.
Focus CEO Rudy Adolf said he expects partnerships to increase after the size and number of deals closed already this year.
The RIA aggregator sealed a $16.5 billion mega deal in May with Boston-based SCS Capital Management. SCS also focuses on ultra-high net-worth firm with average client accounts of $74 million.
Boston-based Lake Street Advisors, which manages $2.7 billion in assets, signed on in April as Focus' sixth partnership in Massachusetts.