Hightower has notched its fourth acquisition of the year by adding the $2 billion Washington, D.C.-based advisory firm Farr Miller & Washington.
The cash-and-equity deal, which will close in about 30 days, has the added benefit of placing the RIA’s founder, Michael Farr, in the newly created role of chief market strategist at Hightower.
Farr, 60, was the primary founder of the firm in 1996 and owns about 80% of the business heading into the sale. The RIA has 20 employees and is 100% employee-owned.
As chief market strategist, Farr will collaborate with Hightower’s investment solutions group, led by chief investment strategist and portfolio manager Stephanie Link.
“This is an exciting next stage of my career,” Farr said. “This also solves the challenge of succession for me and my team, and that’s why the cultural fit was so important to me.”
Hightower has 115 advisory businesses in 34 states and the District of Columbia, and has $125.2 billion under administration.
David DeVoe, managing director at DeVoe & Co., described the acquisition as an “insightful example of the power of scale” because it drives home the point that even the largest firms are now seeking “broader resources that come with an enterprise-grade institution like Hightower.”
“Five billion under management is the new $1 billion,” DeVoe added. “Several years ago, the $1 billion AUM mark was a psychological threshold that seemed to indicate the firm had made it. Today, firms with $3 billion or $4 billion are looking over their shoulder and wondering, ‘Do we need to be bigger to compete in today's marketplace? Should we sell or merge?’”
According to DeVoe’s data on acquisitions, the advisory space has already seen 14 transactions involving firms with more than $1 billion under management this month.
“As one of the top acquirers in 2020 and now with four deals in 2021, Hightower has strong momentum,” he added.
Hightower Chairman and Chief Executive Bob Oros, who has known Farr for several years, described the RIA as “highly respected both inside the Beltway and throughout the U.S.”
“I have known Michael personally for over 15 years and we couldn’t be more thrilled that they have chosen to join Hightower for the next chapter of their growth and are honored to be welcoming them to the firm,” Oros added.
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