Focus Financial partner deal expands access to alternative investments

Focus Financial Partners is making its first acquisition of an alternative investments manager through a merger between partner firm Kovitz Investment Group Partners and Origin Holdings Co.

Origin, a private real estate fund manager based in Chicago, is expected to retain its leadership and investment team while continuing to offer real estate funds under the Origin brand.

Kovitz, which is also based in Chicago, is expected to help launch access to Origin’s alternative strategies for Focus Financial’s network of partner firms.

"Origin will add to Kovitz’s already robust private real estate solutions at a time when alternative investments are becoming increasingly important in meeting the needs of sophisticated investors,” Rudy Adolf, Focus founder, chief executive and chairman, said in a statement.

“Our M&A expertise and capabilities provide strategic value to our partner firms, which in this case will help Kovitz to expand their alternative investment solutions by adding a firm of Origin’s caliber,” he added.

In the midst of a bear market that last year saw the classic 60/40 model portfolio put in its worst performance since 2008, investors and financial advisors are paying more attention to alternative strategies.

Founded in 2007 by David Scherer and Michael Episcope, Origin focuses on multifamily residential real estate investments, managing various funds that buy, develop and lend to multifamily properties, seeking to provide its investors with tax-efficient income, capital appreciation and diversification.

Origin funds have more than 3,000 individual investors, many of whom were referred to Origin through its partnerships with other firms that serve high-net-worth and ultra-high-net-worth clients, according to the company. And Origin’s performance places it in the top decile of the best-performing private real estate fund managers of 2022, as ranked globally by Preqin, an independent provider of data on alternative investments.

The Origin deal will build on Kovitz’s track record in real estate investing by substantially expanding the footprint and scale of Kovitz’s private real estate fund offerings for clients.

"In evaluating strategic partners, our objectives were to preserve and promote the continuity of our well-established brand while also gaining access to additional resources to help us better serve our funds’ investors and grow our business," said David Scherer, Co-CEO of Origin.

The transaction is expected to close by the end of March.