Another record-breaking year for RIA M&A? Q4 will decide.
Driven by mega-deals, the RIA M&A market heading into the fourth quarter is poised to be the busiest ever.
“It looks as if 2019 will be the strongest RIA M&A year on record,” says David DeVoe, managing partner of his eponymous M&A consulting firm. “Activity is running 30% higher than 2018, which was itself a record year.”
Deals by large firms are expected to drive the feverish market.
According to a recent DeVoe & Co. survey, three-quarters of firms with $1.5 billion in AUM or more say they expect to buy another firm in the next two years. And so far this year, nearly 50 deals have involved RIAs with at least $1 billion in assets, according to M&A consulting and valuation firm Echelon Partners.
Altogether, Echelon is projecting that by December — for the first time ever — more than 200 RIA deals will be struck in a single year.
Momentum for the potential record-breaking year was accelerated by several major deals at the end of the third quarter.
Mariner Wealth Advisors completed its fifth acquisition of 2019 by purchasing Snow Creek Wealth Management, an RIA based in Nashville, Tennessee.
Snow Creek’s latest Form ADV filed with the SEC in February lists $275 million in AUM. Mariner says the assets now total around $300 million.
Snow Creek partners and co-founders David Goldberg and Larry Sacks will remain with Mariner Wealth Advisors and continue to manage the Nashville location. “The fact that Mariner Wealth Advisors has its own trust company really excites us,” Sacks said in a statement.
Mariner is also opening a new office in Wichita, Kansas, and hired Eddie Dulin, former senior vice president of wealth management at Merrill Lynch, to bolster its Scottsdale, Arizona, office.
Also in late September, Rockefeller Capital Management announced plans to purchase Financial Clarity, a $2.3 billion wealth manager in Mountain View, California, the heart of Silicon Valley. Financial Clarity specializes in the ultrahigh-net-worth market, targeting clients with at least $30 million in investible assets.
In addition, Mercer Advisors, one of the industry’s most aggressive buyers, recapitalized in September, signaling more purchases to come.
Oak Hill Capital Partners, a Manhattan-based private equity firm, took a sizeable stake in Mercer, which has more than $16.5 billion in assets under management.
Mercer has been one of the industry’s most active consolidators.
It has acquired 23 advisory firms since 2016 and was the RIA industry’s second biggest buyer last year, purchasing eight firms. Mercer has already acquired six RIAs this year.