Mercer Advisors scooped up two more RIAs, expanding the private equity-backed acquirer’s nationwide footprint to 26 offices with $11.6 billion in assets under management.
The Genstar Capital-owned Mercer purchased Murray & Co. and Pinnacle Investment Management, the firm said this week. Mercer, which is based in Santa Barbara, California, completed eight M&A transactions in 2017 amid years of accelerating growth.
Aggregators and well-capitalized RIAs like Mercer have pushed M&A deals to record highs in volume and AUM, with PE funding serving as a key factor in many of the transactions. RIAs usually find between 10 and 20 qualified buyers if they place their firms on the market, according to industry observers.
Mercer hired Dave Welling as its CEO last year, freeing up former CEO Dave Barton to focus on leading its M&A deals. The firm’s latest rollups include the Austin, Texas-based Murray & Co., which has $85 million in AUM, and the Simsbury, Connecticut-based Pinnacle, which has $180 million in AUM.
Mercer’s “ample middle and back office capability” allows Pinnacle’s advisors to focus on their clients, founder John Eckel said in a statement. “Mercer’s size, strength, culture and family office structure is the future for firms like us to meet all of our collective goals.”
Eckel leads a team of three advisors at Pinnacle, while Murray & Co. owner Dean Murray is one of his firm’s two advisors. Both transactions closed in late December, although the firms did not disclose the terms of the deals.
Pinnacle set up as a C corporation in recent months, working out stock appreciation rights to staff under an overall succession plan, Barton says. Eckel’s team also launched a donor-advised fund for charitable and tax planning services, according to Barton.
“This was not a cookie cutter transaction,” Barton said in a statement. “Our legal team was able to successfully address all these nuances with John’s team, culminating in a highly accretive after-tax transaction for both parties.”
Mercer’s AUM has jumped 93% from $6 billion since Genstar Capital bought Mercer from fellow PE firm Lovell Minnick Partners in 2015. However, the firm’s prior lead sponsor took a stake in Mercer in 2016 as part of Mercer’s deal with Lovell Minnick to purchase Houston-based RIA Kanaly Trust.