Michael Nathanson is years away from exiting the investment advice business.
But that doesn't mean that the 45-year-old chief executive of The Colony Group LLC ignored the Boston-based firm's need for the deft execution of a succession plan, particularly when older executives, including its founder, wanted to retire.
Succession planning is really about making sure the business and services for clients are continuous, he said.
“I prefer to think of it as continuity planning. It is more than just succeeding yourself,” Mr. Nathanson said.
A year ago, The Colony Group, which managed $1.3 billion in assets at the time, agreed to join Focus Financial Partners LLC, bringing total assets under management at one of the largest adviser partnerships/roll-ups to $45 billion.
“We didn't go into the Focus transaction thinking about succession planning, but that's how it turned out,” Mr. Nathanson said.
“We had been looking to collaborate with other firms and were attracted to Focus because it had expertise, experience and capital,” Mr. Nathanson said.
“We were not looking to sell. Focus sought us out. We didn't seek out anyone else,” he said.
The deal fit for a variety of reasons, Mr. Nathanson said.
It “facilitated the retirement of four senior owners, with no burden on the firm,” he said.
The transaction also allowed the firm to generate cash and Focus stock so that the 20 other partners could pay off debt taken on to buy shares of The Colony Group — and also turn a profit, Mr. Nathanson said.
Teaming with Focus also gave the firm the capital to expand.
In May, The Colony Group acquired Mintz Levin Financial Advisors LLC. The combined entities now have more than $2.5 billion in client assets.
“We ... deepened our bench and expertise with the acquisition,” Mr. Nathanson said.
When Mr. Nathanson joined the firm, there were just six partners.
So he built a structure to create new partners, both in terms of organization and how it would be financed.
“[Colony founder] Kirby [Hamilton] realized that he needed to build out the ranks of current and future leaders of the company, and to make sure ownership wasn't concentrated in him,” Mr. Nathanson said.
And Mr. Nathanson, who is also the firm's chairman and president, regards planning for his retirement as related directly to The Colony Group's long-term stature.
“The day I do retire, I will already have ensured that this company has implemented plans to ensure that my actual retirement will be a non-event,” he said. “If that's not the case, then I haven't done my job.”
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