Cerity Partners buys Blue Prairie Group to create $21 billion advisory firm

Blue Prairie's retirement plan business gives Cerity Partners an 'end-to-end' solution.

New York-based wealth manager Cerity Partners is taking a big step into the retirement plan space with the acquisition of Blue Prairie Group, which oversees $11 billion in retirement plan assets.

The combined company, which will operate as Cerity Partners, will advise on more than $21 billion in client assets. It represents the latest example of firms expanding to provide the “full complement” of services, from retirement plans to individual wealth management.

“This move to expand Cerity Partners’ retirement planning business strengthens a complementary line of business,” said David DeVoe, managing director at the investment bank DeVoe & Co.

“The retirement business will potentially benefit from strong centralized investment management, and Cerity Partners’ high-net-worth strengths will help the former Blue Prairie further penetrate the management ranks of their retirement clients,” Mr. DeVoe said.

Cerity Partners, which changed its name from HPM Partners in January, has the private-equity backing of Lightyear Capital, which bought a 50% stake in the registered investment adviser in January 2018.

Until now, Cerity Partners, which was founded in 2009, primarily advised individuals, although it had a small retirement plan business.

Kurt Miscinski, president and chief executive at Cerity Partners, said that even with the addition of $11 billion worth of retirement plan assets, individual wealth management will still represent about three-quarters of the firm’s revenues.

Blue Prairie Group, which was founded in Chicago in 2002, works almost exclusively with midsize and large retirement plans.

The combined firm is designed to connect with multiple types of investors and investor relationships, said Ty Parrish, managing partner at Blue Prairie Group, who will assume the role of practice leader of the retirement plan services group at the combined firm.

“It’s the wave of the future to be diversified,” Mr. Parrish said. “There has been a trend over the last half-dozen years with plan sponsors wanting fiduciary advisers to start talking with employees and offer advice on that level. This makes us one of the few companies with an end-to-end solution.”

Dick Darian, chief executive of Wise Rhino Group, a merger and acquisition specialist that advised Cerity Partners on the deal, said the “connectivity between retirement plan advisers and wealth advisers is getting closer.”

“More and more, it’s a service to the plan sponsor to engage participants to help them make the right decisions,” Mr. Darian said. “But they are also in a great position to engage executives in the C-suite on everything from family office services to financial advice.”

Wise Rhino Group partner Bob Francis said another driver bringing retirement plan advisers together with traditional wealth advisers is the need for diversification.

“The economic side of it is, fees are getting smaller in retirement plans,” he said. “Fee compression has hit everywhere, but probably more so in the retirement plan side, and this is a way for retirement plan advisers to get a cushion.”