Genstar Capital buys majority stake in Cetera Financial Group

The private-equity firm has previously invested in such companies as Mercer Advisors and AssetMark

Jul 17, 2018 @ 5:51 pm

By Greg Iacurci

Cetera Financial Group, a network of six independent broker-dealers with about 8,000 brokers and advisers, said Tuesday evening that private-equity firm Genstar Capital will buy a majority equity stake in the company.

Cetera's holding company, Aretec Group Inc., has entered into a definitive agreement with Genstar. Terms of the deal, slated to close in the third quarter, were not disclosed.

Cetera's leadership team is "maintaining a meaningful ownership position," according to a press release, which didn't specify that position.

The deal marks the completion of Cetera's review of its capital structure, which the company publicly acknowledged in February. LPL Financial and Lightyear Capital, the owner of Advisor Group, had also expressed interest in a potential deal that was speculated to value Cetera at about $1.5 billion.

Genstar isn't new to the financial advice business. It has previously invested in companies such as Mercer Advisors, an independent registered investment adviser, and AssetMark, which offers an investment, client relationship and practice management platform for independent financial advisers.

In a note to advisers following its announcement, Robert Moore, the CEO of Cetera, said Genstar is a growth-oriented investor looking to invest in Cetera's "technology, advisor office enablement, and organic growth levers such as recruiting, succession planning and client acquisition."

Jon Henschen, a recruiter and consultant for independent broker-dealers, said it's difficult to gauge how successful the transaction will be, from the standpoint of the Cetera brokers, since Genstar hasn't previously invested in an IBD.

"This is going to be a new experience for them, and there's no track record to go by in terms of broker-dealers after they're purchased," Mr. Henschen said. "We've seen good and bad with private equity."

"The next two years will be quite telling, if they'll be a [broker] supporter or a cost-cutter," he added.

Going forward, Cetera will maintain a "multi-affiliation structure" that will "collectively serve the full spectrum of independent advisor businesses and financial institutions," according to the news announcement.

The board of directors who will guide Cetera's direction include Mr. Moore; Genstar managing director Tony Salewski and vice president Sid Ramakrishnan; Ben Brigeman, former executive vice president at Charles Schwab & Co.; and Hal Strong, former vice chairman of Russell Investments.

The six firms that make up Cetera's independent broker-dealer network are: Cetera Advisor Networks, Cetera Advisors, Cetera Financial Institutions, Cetera Financial Specialists, First Allied Securities and Summit Financial Services Group.


What do you think?

View comments

Recommended for you

B-D Data Center

Use InvestmentNews' B-D Data Center to find exclusive information and intelligence about the independent broker-dealer industry.

Rank Broker-dealers by

Featured video


FPA's Shannon Pike: What's next for the financial advisory profession?

As we head toward 2019 and beyond, regulation and compensation will continue to dominate the headlines. Shannon Pike of the FPA explains.

Latest news & opinion

LPL rolls back recruiting policy aimed at driving more assets to its corporate RIA

LPL erases $50 million hurdle for new advisers to join so-called hybrid firms.

Don't be fooled by the numbers — the industry is in a dangerously vulnerable state

Last year's stock market gains helped advisers turn in solid growth in assets and revenue, but that growth could disappear in the next market downturn.

Divided we stand: How financial advisers view President Trump

InvestmentNews poll finds 49.2% approve of his performance, while 46.7% disapprove. How has that changed over the course of his presidency?

10 states with the most college student debt

Residents of these states have the most student debt when you consider their job opportunities.

Ex-Wells Fargo brokers sue for damages, claiming they lost business in wake of scandals

In a Finra arbitration complaint, two brokers allege that Wells Fargo's problems damaged their business.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print