IBD sells stake to Cambridge, affiliates as $4B enterprise
A 26-year-old firm sold a minority stake to Cambridge Investment Research ahead of dropping its broker-dealer, as smaller players in the sector seek out larger partners.
FCG Advisors Managing Director John Combias is maintaining control of the Chatham, New Jersey-based firm with 19 advisors and licensed employees managing nearly $4 billion in assets under administration, Cambridge spokeswoman Cindy Schaus said in an email.
Cambridge’s acquisition of a “small minority stake” has closed, Schaus added. The parties didn’t disclose the terms of the deal. In September, FCG formally affiliated as a Cambridge enterprise, which is the firm’s name for its largest offices of supervisory jurisdiction.
FCG generates about $9 million in annual revenue, and its RIA listed $1.16 billion in assets under management in its latest SEC Form ADV. Cambridge topped $1 billion in revenue in 2019 for the first time, boosting its business by 43% in the past five years, according to Financial Planning’s IBD Elite survey.
The IBD made a similar fold-in deal for a shuttering BD in 2018, when it purchased Broker Dealer Financial Services. Rising expenses and trimmed margins have fueled consolidation in the IBD sector.
“We plan to further expand our enterprise by taking advantage of Cambridge’s solutions for growth and guidance on best practices to further elevate our success,” Combias said in a statement.
The 40-year industry veteran, along with COO Thomas Holevas and Operations Manager Christopher Glatz picked Cambridge after discussions with consultants on their choice, according to the firms.
“Optimum support for enterprise growth, culture, economic and market dynamics are key factors that affect a broker dealer and its financial professionals in making a change like this,” Cambridge CEO Amy Webber said in a statement. Webber added that the deal enables “expanded resources, reduced risk and a focus on growth of their financial professionals and their clients.”
Cambridge has made about one acquisition deal a year for the last five years, according to Schaus. Such deals have become a larger focus at Cambridge since April, when it tapped ex-Advisor Group and Pershing veteran executive Steve Chipman to lead its acquisition strategy.