Focus Financial inks record RIA deal with SCS Financial

$16.5 billion RIA marks the 10th deal this year and largest ever for the roll-up firm

May 15, 2017 @ 7:00 am

By Jeff Benjamin

In its largest deal yet, RIA consolidator Focus Financial Partners has acquired a majority stake in the revenue stream of Boston-based SCS Financial, a $16.5 billion financial planning firm.

The deal, which is Focus' 10th so far this year, represents the 48th partner firm under Focus Financial, which last month announced a new partnership with private equity owners.

"Every year is a busy year for us, but in terms of current momentum, this is hands-down our busiest year," said Rudy Adolf, founder of Focus Financial.

Focus has made more than 20 deals in each of the past two years, but the SCS deal is more than two times larger than its 2007 deal with Buckingham Family of Financial Services, which has grown to more than $30 billion under management from $7.7 billion at the time of the deal.

Without disclosing specifics of the SCS deal, Mr. Adolf said Focus typically acquires about 50% of an RIAs revenue stream and that the SCS deal included slightly more than 50%. Terms of the deal were not disclosed.

SCS co-founder and chief executive Pete Mattoon did not immediately respond to a request for comment.

SCS, which has 77 employees and offices in Boston and New York, was founded in 2002, and was ranked by Barron's as one of America's top 40 wealth management firms during each of the past three years.

"Focus Financial is on a short list of firms that have the capital to acquire a firm the size of SCS," said David DeVoe, managing partner at the consulting firm DeVoe & Co.

"With Focus' capital and capital partners, there are very few limits on the kinds of firms they can acquire," he added. "And they continue to demonstrate momentum on all fronts."

In terms of what's in it for SCS, Mr. Adolf referenced the access to capital that lets partner firms make their own acquisitions.

"Our capital and capabilities help our partners find partners," he said. "It is a very attractive way to grow, and they don't have to tap into their own capital to make acquisitions."

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