Private Ocean grows to $2.2 billion with acquisition of Mosaic Financial

Combined financial planning operation gives the firm an expanded footprint in the San Francisco area

Sep 24, 2018 @ 10:14 am

By Jeff Benjamin

Private Ocean is continuing its expansion in the San Francisco area with the acquisition of Mosaic Financial Partners.

The addition of the $620 million advisory firm gives Private Ocean a presence in San Francisco and the North Bay and East Bay areas, said Greg Friedman, chief executive and co-founder of Private Ocean, which is based in San Rafael, to the north of San Francisco.

The combined firm will have approximately $2.2 billion under management. The deal is expected to be announced Tuesday.

Mr. Friedman said multiple locations are crucial to accessing and serving investors in the San Francisco area given the fact that "there are a lot of bridges out here and people don't like to cross them."

In January, Private Ocean acquired Lakeview Financial Group, a $380 million Seattle-based advisory firm, which was Private Ocean's only other acquisition since the firm was founded through a merger nine years ago.

"We're definitely not a roll-up, and our strategy is not to buy everybody we can," Mr. Friedman said.

David DeVoe, managing director at the investment bank DeVoe & Co., was involved in the deal and said there is no reason to expect that this is the start of a buying binge by Private Ocean.

"They are clearly becoming one of the bigger players, and the San Francisco Bay area has some of the highest-earnings zip codes in the country, so it is an asset to have multiple locations in the area," he said. "But they are only interested in acquiring firms that are unique fits, so I wouldn't expect to start seeing Private Ocean flags popping up all over the country."

The Mosaic deal is part of a succession plan strategy, like the 2009 deal that combined Friedman & Associates with Salient Wealth Management to create Private Ocean.

Norman Boone, who founded Mosaic, is 71 and said the terms of the agreement have him working about three more years at Private Ocean.

Mr. Boone and Mr. Friedman, 57, have known each other for years, but the idea to combine their firms came after Mosaic was unable to put together an internal succession plan.

"As we talked with other companies, it became clear there were many similarities between Private Ocean and Mosaic," Mr. Boone said. "They gave us a very good offer, but it wasn't the best offer we had."

Terms of the deal were not disclosed.

Mr. Boone began his financial advisory career 32 years ago working at Salient, the firm that merged with Mr. Friedman's firm nine years ago. Mr. Boone went out on his own to start Mosaic after just one year with Salient.

In 2003, Mr. Boone co-authored the first book ever published by FPA Press, "Creating an Investment Policy Statement: Guidelines & Templates." The book was published in conjunction with the launch of IPS AdvisorPro, an investment policy software designed for advisers. The software business was sold in 2013 to fi360.

Mosaic has 20 employees, 11 of whom are client-facing, while Private Ocean has 35 employees, 11 of whom are client-facing.

In addition to Mr. Boone, Mosiac partner Kevin Gahagan will join Private Ocean as a partner.

Sabrina Lowell, chief operating officer at Mosaic, and Channing Hussey, director of operations, will be buying in as partners once the deal is closed.

"We have known Norm and the principals of Mosaic Financial for many years and have great respect for their people, their processes and their values," Mr. Friedman said. "Coming together is a natural fit for us and we are excited to continue exploring our opportunities to better serve our clients."

The deal is expected to close Oct. 1.


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