Reverence Capital Partners Announces Acquisition of Advisor Group from Lightyear Capital and PSP Investments
Advisor Group to Remain Independent and Privately-Owned, Under Existing Management
Reverence Capital Partners to Build on Advisor Group’s Growth Momentum, Technology Innovation and Commitment to Service
New York, NY and Phoenix, AZ – May 9, 2019 – Reverence Capital Partners (“Reverence Capital”), a private equity firm focused on investing in financial services businesses, today announced that affiliated investment funds have signed a definitive agreement to acquire Advisor Group, Inc. (“Advisor Group” or “the company”) from Lightyear Capital, PSP Investments and other shareholders.
Under the terms of the transaction, Reverence Capital will purchase 75% of Advisor Group from its shareholders, with Lightyear Capital, PSP Investments and all other shareholders maintaining up to a 25% share. The transaction, which is subject to customary regulatory and other approvals, is projected to be completed during the third quarter. Financial terms were not disclosed.
Transaction Details
It will remain business as usual for financial advisors and employees with this new ownership structure. Advisor Group – one of the nation’s largest networks of independent financial advisors, with more than 7,000 financial advisors – will continue to operate as an independent and privately-held company, under the existing brands and organizational structure of the company and its four member firms: FSC Securities Corporation, Royal Alliance Associates, Inc., SagePoint Financial, Inc., and Woodbury Financial Services, Inc.
Under the terms of the transaction, Jamie Price will continue to serve as Chief Executive Officer of Advisor Group, leading the existing management team for the company as well as continuing to serve on its Board, along with representatives from Lightyear Capital, PSP Investments and other members to be selected by Reverence Capital Partners in the coming weeks. Valerie Brown, currently Executive Chairman, will retire from her executive position. She will remain an investor in the company.
As part of the transaction, Advisor Group, in coordination with Reverence Capital, expects to establish an advisor recognition and retention program, with details to be announced between signing and close.
“We are extremely fortunate to bring such a highly sought after and respected business into our investment portfolio,” said Milton Berlinski, Co-Founder and Managing Partner of Reverence Capital. “Advisor Group is one of the premier wealth management platforms in the U.S. and together with Reverence Capital’s investment, wealth management expertise and industry relationships, the company is uniquely positioned to identify and tackle growth opportunities across the business.”
Mr. Berlinski continued, “Reverence Capital is investing in a strong and experienced management team.We look forward to working closely with them every step of the way.”
“We are in the early innings of the fiduciary era, we have a nice lead and we plan on winning,” said Jamie Price, President and CEO of Advisor Group. “And winning in our book is our ability to continue to make significant investments in our business to give our advisors the technology, service and products they need to serve their clients in this fiduciary era and position their businesses for long-term success and growth. This transaction, which aligns Advisor Group with well-resourced financial partners, accomplishes just that, to the benefit of the financial advisors we’re privileged to serve.”
Summary Background and Performance Highlights
As part of this transaction announcement, Advisor Group provided the following summary background and performance highlights for the company:
- In 2016, Advisor Group, a subsidiary of American International Group (“AIG”), was purchased by investment funds affiliated with private equity firm Lightyear Capital LLC and PSP Investments, becoming a privately-held, network of wealth management firms exclusively focused on serving independent financial advisors.
- Since 2016, Advisor Group has grown to over 7,000 financial advisors, up from 5,200 advisors at the time of its acquisition by Lightyear Capital and PSP Investments.The company’s significant growth in advisor headcount has been driven by strong recruiting results as well as several strategic acquisitions and recruiting deals, including Capital One Investing, Signator Investors and Questar Capital.
- For full-year 2018, the financial advisors served by Advisor Group continued to experience above-average growth net of the market, underscoring the company’s success in focusing on wealth management solutions, technology and advisor growth programs that fuel outperformance for its advisors.
- Client assets under administration are currently $268 billion, up $78 billion from $190 billion at YE 2017 and AUM increased 30% in that same period.
Looking Ahead
Valerie Brown, Executive Chairman of Advisor Group stated, “I’m extremely grateful for the extraordinary success that our advisors and employees have created over the last three years. The future is bright for Advisor Group, its employees and advisors. Having worked closely with Lightyear and PSP in reviewing potential transaction partners, I am confident that Reverence Capital Partners will enhance Advisor Group’s momentum by supporting investments in solutions that enable our advisors to best serve their clients and achieve their business goals.”
Mr. Price concluded, “We’re grateful to Lightyear and PSP Investments for all the investments they have made in our growth and success to date.Equally important, we’re pleased with the Board’s careful and deliberate selection of new private equity partners that will enable us to continue to operate in a familiar model, with no impact to our employees and advisors, and significant long-term opportunities to build on our growth momentum and success in helping our advisors grow.”
About Advisor Group
Advisor Group, Inc. is one of the nation’s largest networks of independent financial advisors serving over 7,000 advisors and overseeing $268 billion in client assets. Headquartered in Phoenix, AZ, the firm is mission-driven to support the heroic role that advisors can play in the lives of their clients, offering securities and investment advisory services through its subsidiaries FSC Securities Corp., Royal Alliance Associates Inc., SagePoint Financial, Inc. and Woodbury Financial Services, Inc., as broker/dealers, registered investment advisors and members of FINRA and SIPC. Cultivating a spirit of entrepreneurship and independence, Advisor Group champions the enduring value of financial advisors and is committed to being in their corner every step of the way. For more information visit https://www.advisorgroup.com
About Reverence Capital Partners
Reverence Capital Partners is a private investment firm focused on thematic investing in leading global, middle-market Financial Services businesses through control and influence oriented investments in 5 sectors: (1) Depositories and Finance Companies, (2) Asset and Wealth Management, (3) Insurance, (4) Capital Markets and (5) Financial Technology/Payments. The firm was founded in 2013, by Milton Berlinski, Peter Aberg and Alex Chulack, after distinguished careers advising and investing in a broad array of financial services businesses. The Partners collectively bring over 90 years of advisory and investing experience across a wide range of financial services sectors.For more information visit https://www.reverencecapital.com/
Media Inquiries
For Advisor Group:
Joseph Kuo / Chris Clemens
Haven Tower Group
424 317 4851 or 424 317 4854
jkuo@haventower.com or cclemens@haventower.com
For Reverence Capital Partners:
Steve Lipin / Michael Flaherty
Gladstone Place Partners
212 230 5930