Private equity investors are giving United Capital Financial Advisers a vote of confidence and an infusion of cash.
The firm's holding company has taken in $38 million in new investments to help fuel its growth and provide some existing advisers with cash, United Capital chief executive Joe Duran said Monday.
Mr. Duran said the firm will spend the seed money on its branding efforts and on new acquisitions to add advisers and expand its presence around the country.
United Capital, founded in 2005, manages $9 billion in assets, with an additional $9 billion under advisement for pension plans, according to the firm.
United Capital is one of about a half dozen firms that are growing rapidly by consolidating advisers under a single brand. Unlike Dynasty Financial Partners, Focus Financial Partners, HighTower Advisors, National Financial Partners Corp. and Securities America Inc., United Capital is targeting small independent advisers instead of breakaway brokers. For new offices, United Capital targets growth-oriented advisers at independent broker-dealers who have $200 million to $500 million in assets.
The firm has doubled its revenue every two years and had nearly $100 million last year, company official said.
Private equity firm Sageview Capital contributed the lion's share of the new investment, $30 million, while the remainder was contributed by existing investors Bessemer Venture Partners and Grail Partners, according to United Capital.
Mr. Duran said Sageview secretly visited eight of the firm's 47 locations before investing.
“The thing they're most interested in is a very compelling new segment, and that's the wealth-counseling segment,” said Mr. Duran, whose financial planning philosophy, described in the book “The Money Code: Improve Your Entire Financial Life Right Now” (Greenleaf Book Group Press, 2013), permeates the firm. “It's really about helping people make financial decisions about their entire lives, not just their investments.”
A spokeswoman for Sageview Capital was not immediately available.
Part of the money will be deployed to finance a program started this month that allows existing advisers to withdraw cash, said Gary Roth, United Capital's chief financial officer.
The program is intended to solves advisers' problem of not being able to generate cash from what is often their most valuable asset, their business, according to Mr. Duran.