Two Boston-based RIA firms will be joining forces to create a combined firm with client assets of about $2.5 billion.
Mintz Levin Financial Advisors LLC, with more than $1 billion in client assets, has agreed to be merged into The Colony Group LLC, which has about $1.3 billion under management or advisement. Mintz Leven currently stands as the 136th largest fee-only RIA in the InvestmentNews RIA Data Center.
The deal was announced Wednesday by Focus Financial Partners LLC, which is part owner of The Colony Group.
Terms were not disclosed.
Mintz Levin will adopt the Colony name and relocate its Boston office into Colony's existing Boston space. Together, the firms will have 65 employees.
The two firms "knew each other for a number of years [and] there was a recognition that the skills and capabilities of both firms were very complementary," said Rudy Adolf, founder and chief executive of Focus Financial.
"Basically, as a united firm, they [thought they] would be better positioned in terms of serving clients and creating on-boarding opportunities for future partners," he said.
Mintz Levin will be fully integrated into Colony, Mr. Adolf said.
Colony is headed by chairman and chief executive Michael Nathanson.
Robert Glovsky, president of Mintz Levin, will join Colony's executive management team.
"We've been friends for 15 years," Mr. Glovsky said. When Mintz Levin went through a succession-planning process, "we knew Colony was the best fit by far."
"What [the merger] does … is give us an even deeper bench strength," Mr. Nathanson said, as well as more resources and access to top talent to provide better client service.
Colony also provides ownership opportunities to employees, Mr. Glovsky said. "That was very attractive to us and our people."
Mr. Glovsky and Mintz Levin executive vice president Cary Geller will join 19 existing Colony employees as owners, Mr. Nathanson said.
The deal is a good example of two RIAs coming together to "solve the succession equation," said David DeVoe, managing partner of DeVoe & Company LLC, a mergers and acquisitions consultant.
He calls it a "transaction succession" plan, where newly acquired talent can be positioned to take over.
"The successor is not a junior person or someone from outside the industry," he said. "It's a team already running a similar firm. That mitigates a lot of risk."
In addition, as the need to provide better service intensifies, more firms in the fragmented adviser space will likely come together to "collectively improve their service offerings," Mr. Nathanson said.
Focus Financial, which helped Colony structure and finance the merger, says the transaction will bring its partner firm assets to more than $50 billion.
(For more information on more than 2,300 fee-only RIAs, visit the InvestmentNews RIA Data Center.)