Kestra Financial latest broker-dealer to be put up for sale

The independent B-D's owner, Stone Point Capital, has tapped Goldman Sachs to lead the deal

Dec 14, 2018 @ 1:01 pm

By Bruce Kelly

Kestra Financial Inc. is the latest large independent broker-dealer to be put up for sale and is currently being shopped around by its private equity parent, according to industry sources.

Kestra was formerly known as NFP Advisors when it was owned by insurance brokerage and consultant NFP Corp. The broker-dealer was sold in 2016 to private equity shop Stone Point Capital, which bought a majority stake at the time and changed its name to Kestra.

Three industry sources who wished to remain anonymous told InvestmentNews this week that Stone Point had recently hired Goldman Sachs as its banker in the transaction. The first round of bids may be due as soon as next week, those sources said.

One of those sources added that the bankers at Goldman were the same team that successfully led the sale over the summer of a majority stake of Cetera Financial Group to Genstar Capital, another private equity investor.

James Poer, the CEO of Kestra, did not return a call on Friday to comment. A spokesperson for the firm, Leah Katsanis, said that Kestra Financial was not providing comments about the matter at this time.

A spokesman for Goldman Sachs, Andrew Williams, said the firm had no comment.

Private equity investors have continued to buy independent broker-dealers and RIAs of late. Genstar Capital, which paid $1.7 billion for Cetera and financed the majority of that with junk bonds, is one of the most prominent.

According to InvestmentNews data, Kestra Financial last year was ranked the 15th largest independent broker-dealer in the industry, when counting total revenue. Kestra reported $475.4 million in total revenue at the end of 2017, with 1,876 registered reps and financial advisers. The firm's assets under management were $75.8 billion at the time.

Kestra clears with Fidelity's National Financial Services. Matching clearing platforms in a broker-dealer sale is always a consideration because having the same clearing firm makes the transition of advisers' client accounts much easier.

In August 2017, Kestra Financial said it acquired the 600-rep firm H. Beck Inc.


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