Warburg Pincus among private equity managers interested in acquiring Kestra Financial

Sources say Kestra is being valued at between $600 million and $800 million, about eight to 10 times EBITDA

Feb 15, 2019 @ 2:07 pm

By Bruce Kelly

Warburg Pincus is among the private equity managers interested in acquiring Kestra Financial Inc., according to two industry sources.

Bids were due this week for the independent broker-dealer, and a sale could be announced within the next few weeks, according to the sources, who did not want to be identified.

InvestmentNews in December reported that Kestra was on the block. The firm is being valued at between $600 million and $800 million, which is about eight to 10 times Kestra's EBITDA, or earnings before interest, taxes, depreciation and amortization, the sources said.

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

Kestra Financial 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.

Stone Point Capital is interested in retaining some equity position in Kestra, the sources added.

James Poer, the CEO of Kestra, did not return a call on Friday seeking comment. A spokeswoman for Warburg Pincus, Kerrie Cohen, declined to comment.

Warburg Pincus has $43 billion in private equity investments under management, and 180 companies in its portfolio, according to the firm's website. Past investments in the financial services sector include Yodlee and The Mutual Fund Store.

The other bidders interested in Kestra are also private equity shops, according to sources. Private equity investors have show a continuing interest in buying buy independent broker-dealers and registered investment advisers. Genstar Capital, which paid $1.7 billion for Cetera Financial and financed the majority of that with junk bonds, is one of the most prominent.

0
Comments

What do you think?

View comments

Most watched

Events

Finding innovation in your firm

Adam Holt of AssetMap explains how advisers understand they need to grow, but great innovation may be lurking right under your nose.

Events

Finding your edge from Tony Robbins

Guru Tony Robbins has helped a lot of people, but armed with his psychology Financial Advisor Josh Nelson has helped his practice soar.

Latest news & opinion

Tony Robbins loses role with RIA amid charges of sexual misconduct

String of allegations costs the self-help guru his gig as chief of investor psychology at Creative Planning.

SEC sets June 5 date for vote on Regulation Best Interest

Commission adds new item to agenda: Interpretation of broker guidance that qualifies as advice

House passes SECURE retirement bill with massive bipartisan support

The measure allows small employers to band together to offer plans and raises the RMD age. Another provision eases use of annuities in 401(k)s, which critics say goes too far

10 IBDs with the most annuity revenue

Here are the independent broker-dealers that brought in the most annuity revenue last year.

DOL sets date to propose new fiduciary rule

The regulation, expected in December, likely will be contoured to the SEC's new advice standards.

X

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 investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

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

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print