Private equity houses Stone Point Capital and Kohlberg Kravis Roberts & Co (KKR) are acquiring a majority stake Focus Financial Partners, in a deal that is reported to value Focus at approximately US$2bn (€1.9bn, £1.6bn).
Focus, which is said to be America’s largest independent wealth management partnership, has a handful of overseas network member firms, including the Melbourne-based MW Lomax Group, Canada-based Dorchester Wealth Management, and UK-based Greystone Financial Services, in addition to a joint venture operation in China.
New York City-based Focus announced the deal last night, and said it is expected to complete by the middle of the year, subject to “customary approvals”. It is, Focus said, the “third liquidity event for Focus and its wealth management affiliates since 2013”.
The selling shareholders include Focus’s existing private equity investors – Centerbridge Partners, Summit Partners and Polaris Partners – as well as certain wealth management affiliates and employees.
Focus’s existing senior management team will continue to lead the business, while also remaining “significant” shareholders in their own right, Focus said.
Founded in 2006
Focus was founded in 2006 by Rudy Adolf (pictured above), who is the firm’s chief executive, Rajini Kodialam, and Leonard Chang, and today is comprised of some 45 “partner firms”. It was among the first US advisory firms to evolve away from the “wirehouse broker/dealer” model, in the direction of registered investment advisers (RIAs, as they are known in the US), and its business is said to have grown rapidly as a result.
It has been included on Inc magazine’s annual ranking of America’s fastest-growing private companies five times, including last year.
Last year Focus said it completed 20 acquisitions, and thus far this year it says it’s announced six more.
In a statement accompanying the announcement of the buy-in by Stone Point and KKR, Stone Point Capital chief executive said: “Rudy and his team have built a remarkable business model that provides relentless support to their independent wealth management advisers.
“We are excited to enhance their continued expansion with our sector expertise, and deep network of relationships throughout the financial services industry.”
Henry Kravis, co-founder, co-chairman and co-CEO of KKR, added that Focus “has distinguished itself as the partner-of-choice for leading independent wealth managers in the US and beyond”, and that KKR “looks forward to supporting the firm’s continued success, by leveraging our global network and resources”.
To see a map of the US showing all of Focus’s member firms,alongside a list of them by name, click here.