Why ought to an advisor who will not be actively contemplating a sale or capital companion care about non-public fairness within the RIA area? As a result of, prefer it or not, non-public fairness is right here to remain. It’s not merely some pattern or fad: it represents a paradigm shift within the trade that may form the expansion (and consolidation) of wealth administration corporations for years to come back.
Unsurprisingly, the unbiased area has grow to be a treasure trove for personal fairness corporations—and for a number of good causes.
- RIAs and personal fairness corporations share a typical aim: A concentrate on progress.
- RIAs are an awesome funding: They’ve excessive revenue margins, constant money circulation, and low capital wants.
- And ideally, non-public fairness corporations and the RIAs they put money into are likely to work in partnership: An actual value-add for the RIAs, which may profit from the expanded enterprise data these corporations 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 virtually solely to natural means ever since their founding in 1997. But their imaginative and prescient was to develop by way of inorganic progress and entice different like-minded advisors to grow to be part of their extraordinary agency.
That’s the place non-public fairness agency Reverence Capital Companions got here in. Targeted on investing within the monetary companies area, they see their relationships as strategic partnerships designed to foster progress.
Whereas some unbiased agency house owners nonetheless bristle on the considered promoting a chunk of their enterprise, Mark Copeland, founding companion of SEIA, sees it a lot otherwise, as he discusses on this episode.
In Reverence Capital, he noticed a companion with a shared imaginative and prescient and the capital that may enable them to concentrate on reaching their imaginative and prescient for SEIA.
Likewise, Ben Prigal, Vice President at PE agency Reverence Capital, gives an identical perspective. In SEIA, they noticed a companion with an excellent enterprise, a powerful administration group, and substantial progress alternatives.
Collectively, they share each side of the capital partnership story on this particular episode with Louis Diamond, together with:
- SEIA’s imaginative and prescient—and so they recognized Reverence as the precise companion to realize their targets.
- Progress and succession methods—and the way a personal fairness agency’s funding can profit an RIA.
- Wanting past capital—and the way a personal fairness agency can present further worth to the unbiased agency.
- Figuring out the precise companions—and the way each an RIA and personal fairness agency view a very good match.
The episode offers two attention-grabbing views on reaching progress and gives invaluable recommendation on deciding when or if promoting a portion of the enterprise is the precise path to take.
