A rapidly expanding RIA with two private equity investors added $160 million in assets under management in its latest acquisition.
Mercer Advisors grew to over $9.6 billion in AUM through a merger completed last week with Duckworth Wealth Advisors. The Santa Barbara, California, firm has purchased a total of six RIAs with $2.5 billion in AUM in the past 13 months.
The deal came the month after Mercer acquired Novos Planning Associates, a $100 million New York RIA. Mercer CEO David Barton says he hopes to increase the number of locations around the country to 40 within the next three years , nearly double its current footprint of 23 offices.
The newest deal, which brings the Newport Beach, California, RIA into the fold, has been in the works for four to five months, says Barton. Although Barton declines to discuss terms, he credits David DeVoe of the consulting and research firm DeVoe & Co. for approaching Mercer.
“He thought that our business model and our way of doing things was a good fit for his client,” Barton says. “He introduced us, and we hit it off famously.”
Duckworth founder Michael Duckworth, three other principals and 10 other employees will join the Mercer brand through the deal. The firm listed between 26 and 100 mostly high-net-worth individual clients, as well as fees based on both hours and AUM, in its most recent ADV form.
“Our partnership with Mercer allows us to continue our focus on holistically serving clients, a culture we share with Mercer,” Duckworth said in a statement.
Mercer managed $6 billion in AUM with 4,900 clients at the time PE firm Genstar Capital bought a stake in the RIA from Lovell Minnick Partners in 2015, according to Barton. The fellow PE company became a Mercer stakeholder again last spring by selling Kanaly Trust to Mercer.
With the acquisition of Duckworth, Mercer now has 6,400 clients nationwide. The purchases reflect the “tightness of the labor market” for advisers any bit as much as booming business, Barton says.
“If you’re buying a successful RIA, you’re buying talent,” he says. “I think of M&A as a recruiting activity.”