Reverence to Take 75% Stake in Advisor Group

Reverence Capital Companions has signed a deal to purchase a 75% stake in unbiased dealer/vendor community Advisor Group. The agency’s present homeowners, Lightyear Capital and PSP Investments, will retain 25% of the corporate.

Phrases of the deal weren't disclosed. However in accordance with sources throughout the funding banking group, the Reverence deal values the agency at someplace between $2 to $2.5 billion.

Beneath the deal, Advisor Group will proceed to function independently, and its administration staff, together with CEO Jamie Value, will stay intact. Valerie Brown will step down from her place as government chairman, though she’s nonetheless an investor within the firm.

Advisors who've caught with the agency can even doubtless be sharing within the proceeds, through a recognition and retention program, to be rolled out to advisors within the subsequent 30 to 60 days. Value instructed WealthManagement.com this system would doubtless be a mix of recognition, a chance to speculate, and progress.  

“Over the previous three years, a part of the engine that acquired us right here have been our advisors,” Value mentioned. “So to say thanks to them not directly, form or kind, I feel, is prudent.”

Reverence Capital was one in all a number of personal fairness bidders within the working to accumulate the b/d community from Lightyear Capital. Centerbridge Companions was additionally reportedly in talks to purchase the agency. Genstar Capital, which owns Cetera Monetary Group, made an 11th hour try to bid for the agency, in accordance with those self same sources, however their provide remained far beneath the valuation Lightyear and PSP sought and they have been instantly rebuffed.

Reverence Capital is run by former Goldman Sachs banker Milton Berlinski. The agency’s web site says it focuses on a "broad spectrum of middle-market monetary companies firms." It at present owns Russell Investments and Victory Capital, an funding administration agency.  

“Our view is, and I feel the personal fairness view on this and good investor view is, having scale like we do and working with a shared central service mannequin, which has us seem like a big single firm, will get the leverage of getting the quantity of belongings that our advisors have, however we nonetheless get to function on the bottom with 4 distinctive manufacturers and capabilities to draw various kinds of advisors who need to match into varied communities that feel and look like communities they need to be a part of,” Value added. “I feel it’s necessary we’re massive sufficient to make the investments again within the enterprise to assist our advisors serve their purchasers.”

Advisor Group has over 7,000 advisors throughout 4 dealer/sellers: FSC Securities Company, Royal Alliance Associates, SagePoint Monetary and Woodbury Monetary Companies. Previous to its possession by Lightyear, it was a part of AIG. Right here’s a timeline of its possession historical past:

January 1990: SunAmerica, an annuity-focused agency, acquires Royal Alliance Associates, Inc.

January 1996: SunAmerica acquires Benefit Capital Company.

October 1997: SunAmerica acquires Monetary Service Company, the guardian firm of FSC Securities Company.

April 1998: SunAmerica acquires Sentra Securities Company and Spelman & Co., Inc. ("Sentra-Spelman").

August 1998: AIG buys SunAmerica for $18 billion+ in inventory. The deal contains 4 of SunAmerica’s broker-dealers: Benefit Capital, Royal Alliance, FSC Securities and SunAmerican Securities, including 9,500 brokers and monetary planners.

February 2005: AIG types AIG Monetary Advisors Inc. with representatives coming from SunAmerica Securities Inc., Sentra Securities Company and Spelman & Co. Inc.

January 2006: American Basic Securities Integrated joins AIG Advisor Group.

October 2008: AIG pronounces plans to promote AIG Advisor Group. No sale occurs.

January 2009: AIG Monetary Advisors, Inc. (inside Advisor Group) modifications its identify to SagePoint Monetary, Inc.

March 2009: Benefit Capital withdraws Finra registration.

2010: AIG Advisor Group is Renamed ‘Advisor Group.’

December 2012: AIG acquires Woodbury Monetary Companies from The Hartford, including 1,400 reps and $25 billion in belongings underneath administration.

Could 2016: AIG sells Advisor Group, with $160 billion in belongings underneath administration and 5,200 unbiased reps, to Lightyear Capital and Public Sector Pension Funding Board.

Could 9: Lightyear and PSP attain a deal to promote a 75% stake in Advisor Group to Reverence Capital Companions, a New York-based personal fairness agency.