Why ought to an advisor who is just not actively contemplating a sale or capital accomplice care about personal fairness within the RIA area? As a result of, prefer it or not, personal fairness is right here to remain. It’s not merely some development or fad: it represents a paradigm shift within the business that can form the expansion (and consolidation) of wealth administration companies for years to return.
Unsurprisingly, the unbiased area has turn into a treasure trove for personal fairness companies—and for a number of good causes.
- RIAs and personal fairness companies share a typical aim: A deal with progress.
- RIAs are an ideal funding: They’ve excessive revenue margins, constant money move, and low capital wants.
- And ideally, personal fairness companies and the RIAs they spend money on are inclined to work in partnership: An actual value-add for the RIAs, which may profit from the expanded enterprise data these companies deliver to the desk.
Within the case of Signature Property & Funding Advisors (or SEIA), the $19B RIA agency headquartered in Los Angeles and with places of work throughout the nation, their progress was attributed nearly solely to natural means ever since their founding in 1997. But their imaginative and prescient was to develop by way of inorganic progress and appeal to different like-minded advisors to turn into part of their extraordinary agency.
That’s the place personal fairness agency Reverence Capital Companions got here in. Centered on investing within the monetary companies area, they see their relationships as strategic partnerships designed to foster progress.
Whereas some unbiased agency homeowners nonetheless bristle on the considered promoting a bit of their enterprise, Mark Copeland, founding accomplice of SEIA, sees it a lot in a different way, as he discusses on this episode.
In Reverence Capital, he noticed a accomplice with a shared imaginative and prescient and the capital that might permit them to deal with attaining their imaginative and prescient for SEIA.
Likewise, Ben Prigal, Vice President at PE agency Reverence Capital, provides an identical perspective. In SEIA, they noticed a accomplice with an impressive enterprise, a powerful administration workforce, and substantial progress alternatives.
Collectively, they share either side of the capital partnership story on this particular episode with Louis Diamond, together with:
- SEIA’s imaginative and prescient—they usually recognized Reverence as the suitable accomplice to attain their objectives.
- Progress and succession methods—and the way a non-public fairness agency’s funding can profit an RIA.
- Trying past capital—and the way a non-public fairness agency can present further worth to the unbiased agency.
- Figuring out the suitable companions—and the way each an RIA and personal fairness agency view a superb match.
The episode gives two fascinating views on attaining progress and provides helpful recommendation on deciding when or if promoting a portion of the enterprise is the suitable path to take.