Captrust marks 50th acquisition with $2.1 billion RIA

The Raleigh, North Carolina-based aggregator has grown to $60 billion under management and $600 billion under advisement, and claims "no end in sight."

Captrust Financial Advisors is adding $2.1 billion under management with the acquisition of Nachman Norwood & Parrott Wealth Management.

The addition of the Greenville, South Carolina-based advisory firm marks Captrust’s 50th acquisition over the past 15 years, bringing total assets under management to $60 billion and total assets under advisement to $600 billion.

Captrust, which sold a minority ownership stake to private equity investor GTCR last summer, is expected to continue being an active participant in the consolidation of the wealth management industry.

“No end in sight” is how Captrust’s senior director of strategic growth Rush Benton described it.

“We’re in a consolidating industry that is expanding,” he said. “It’s not like there’s a limited number of firms. There are new firms being created every day as people leave the wirehouses. There’s an almost unlimited supply of firms.”

In the past two years, Captrust added 12 firms, including five that have joined so far in 2021.

“Captrust has strong momentum in 2021,” said David DeVoe, founder and chief executive of DeVoe & Co.

“The organization recently crossed the half-trillion [dollar] mark, illustrating the power of scale as a value proposition to would-be sellers,” he added. “The acquisition of NNP is their third acquisition of greater than $1 billion in AUM in 2021.”

A recent report from DeVoe showed 100 deals in the wealth management space announced this year through June, which is the earliest by at least three months that the 100-year mark has been reached in a year.

Benton attributed at least part of the increased pace of consolidation to threats by the Biden administration to impose sweeping tax hikes.

“Potential tax law changes are driving a lot of firms to try and get it done before end of the year,” Benton said.

As large mergers and acquisitions have become a common theme across financial services there has been an increased focus on rising valuations.

“I think valuations are getting a little scary, but we’re still getting transactions done at reasonable valuations,” Benton said. “If a firm is only looking for the top price, they can probably go find a higher price elsewhere. But in this business, it’s seller beware. Longer term, it’s all about the right fit.”