A relatively quiet player in the hybrid broker-dealer and investment adviser business, Snowden Lane Partners, has put its name on the map after picking up a $400 million team of advisers from UBS Wealth Management Americas and crossing $1 billion in assets under management.
The firm, which was founded in 2011 by Robert Mooney, former general counsel at Merrill Lynch, is getting more aggressive after becoming fully capitalized in December 2013. The former UBS team joins the firm as it embarks on a five-year plan to have 30 to 40 adviser teams based around the country operating under the Snowden name — and potentially teams abroad, as well.
(See who else has left UBS)
With that goal, Snowden casts its lot with of a number of other hybrid firms, sometimes referred to as roll-ups, who are looking to bring together breakaway brokers from the wirehouses and registered investment advisers by offering equity.
HighTower Advisors was launched in 2008 with a similar goal and has around 50 firms in its partnership. Cantor Fitzgerald Wealth Partners was started late last year and has a goal of bringing in around 300 advisers over the next three to six years. Steward Partners, which was founded by former Smith Barney executives, is aiming for 50 to 60 partners concentrated in the Northeast and crossed $1 billion in recruited assets this summer.
Industry consultant Alois Pirker of Aite Group said that the proliferation of such firms is a sign of maturity in the independent space.
“This has attracted capital providers like private-equity firms to invest in this market and start buying up registered investment advisers and building larger independent RIA firms,” he wrote in an e-mail. “Clearly, given the fragmentation in the RIA space, there is room for several roll-up players, as long as they can secure capital.”
Mr. Mooney declined to disclose how much the firm has raised. Some capital came from personal investments from Mr. Mooney and two other former Merrill Lynch executives, Lyle LaMothe, who is chairman of Snowden's board, and Gregory C. Franks, a managing partner and president. Another undisclosed amount came at the end of last year from private equity firm Estancia Capital Management.
Mr. LaMothe served as head of Merrill's brokerage force until 2011, and Gregory Franks was a regional director who helped set up international offices for the wirehouse in Pakistan and Egypt. (Merrill Lynch sold its international business to the Julius Baer Group in 2012.)
Snowden Lane had close to $1 billion in assets under management before hiring the UBS team, Mr. Mooney said. The firm already had offices in Los Angeles, Connecticut and New York, mostly thanks to referrals and connections from Merrill Lynch.
The firm is now looking to accelerate that expansion, mostly focused on breakaways from the wirehouses, and eventually bringing on registered investment advisers as well, according to Mr. Mooney. He emphasized that the firm was not targeting only Merrill advisers.
The most recent team of four former UBS advisers, Philip Lazzari, Mark Stevens, Eric Watson and Eric “Lanny” Buckner, joined in Baltimore and operate as the Harbor Wealth Management Group. All four most recently had been with UBS Wealth Management, although they had been with Merrill Lynch until 2010, according to registration records with the Financial Industry Regulatory Authority Inc.
Advisers who join receive some cash up front, but the majority of the compensation comes from receiving equity in Snowden Lane. Mr. Mooney said that talk of any kind of plans for an initial public offering, something touted by competitors, was premature.
“If we put together a performing business, build assets under management and build profitability, then good things happen and your options increase,” he said.
Mr. Franks said that the firm eventually could add international offices, given the knowledge and experience operating abroad that each had. He first met Mr. Mooney while working in London.
“Our hearts are kind of there,” Mr. Franks said. “Although it's not for this time in our lifecycle.”