Focus Financial secures new capital, readies for fresh acquisitions

Focus Financial Partners LLC, which calls itself the largest partnership of wealth management firms in the world, is securing a new capital infusion to help it service outstanding bank debt and continue its business of acquiring stakes in large registered-investment-advisory firms. Focus, launched in 2006 with $35 million in backing from private-equity firm Summit Partners, is getting an investment from Polaris Venture Partners, which has been involved primarily in backing information technology and life science businesses, according to investors close to Focus. Another private-equity firm also is expected to participate in the recapitalization. The new capital comes at a crucial time for Focus, which has acquired stakes in 16 firms with a combined total of more than $20 billion in managed assets since its founding. Focus has not announced a partnership deal since July 2008, although its website explains that the company seeks to partner with two to four “quality firms” every year in order to generate steadily growing revenue — paving the way for an initial public offering or other “liquidity event” for the firm's partners and other investors. “It's a little premature to talk about [the capital infusion], but we can talk soon,” Kevin Mohan, a managing director of Summit Partners, said when asked about the Polaris commitment. The amount of the investment couldn't be determined, but the firms will be buying equity units in Focus at a substantial discount to previous equity sales and receiving a return in the high teens on the debt they are lending, according to another investor, who requested anonymity. “We explore all options, but I can't talk about the details of our debt or equity,” said Jennifer Geoghegan, vice president of marketing and public relations at Focus. “We cannot announce anything until if and when things are completed.” Partners at Polaris did not return calls for comment. To read the complete version of this story, and learn more about Focus Financial's next possible acquisition, please see the Monday, Nov. 9 issue of InvestmentNews