Jefferson National Financial has completed an $83 million management buyout and plans to put the newfound cash to work in growing its distribution to RIA and fee-based advisors.

Financial Partners Fund, The Stephens Group and private investor Eric Schwartz led the investor side of the transaction, the company said in a statement. For Jefferson National’s part, CEO Mitchell H. Caplan led the executive team, which now owns a 10% share of Jefferson National.

The proceeds will be used in areas that RIA services company Jefferson National anticipates will translate into growth. High-net-worth investors are a fast-growing demographic in the financial services industry; RIAs and fee-based financial advisors represent the fastest-growing distribution channel for its products; and advisors and investors are increasingly hungry for superior value products and services.

In 2011, the Louisville, Ky.-based company posted sales of almost $300 million from the Monument Advisor, its flat-fee variable annuity product, Laurence Greenberg, president of Jefferson National said in an interview. That watermark makes Monument Advisor one of the 20 best-selling variable annuities in the industry, Greenberg said. The firm also surpassed $1 billion in total sales last year, owing to its selling relationships with 1,500 fee-based advisors in its distribution network.

“We plan, with the additional capital, to continue on that growth path,” Greenberg said. “We are looking at a 50% growth rate through 2012. We expect … to have over $1 billion a year in sales, and an advisor base that will number in the thousands.”

Financial Partners Fund is a unit of Citi Capital Advisors, and The Stephens Group is a family office that invests in private and public companies. Eric Schwartz is a former partner and management committee member at Goldman Sachs. Now, Schwartz leads a family office.  

“As we look into the future, we would expect management to continue to buy into the company,” Greenberg said.

Donna Mitchell writes for Financial Planning.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access