The combination of the stock market continuing its streak to record highs and a desire to strike a deal by 2020 made the opportunity to
sell United Capital to Goldman Sachs earlier this year too sweet an opportunity for Joe Duran to pass up.
In an onstage interview at the MarketCounsel Summit in Miami Beach Tuesday, Mr. Duran said
his final decision was between selling to Goldman Sachs, a global investment bank, or a private-equity firm.
[Recommended video: Ed Slott: Make sure your small business clients consider this before they convert IRAs to Roths]
Mr. Duran, the CEO and founder of United Capital, had committed to giving his investors, including financial advisers who had sold their RIAs to United Capital, liquidity by 2020.
"Candidly, I always like to come in ahead of when I had hoped, and the markets — when they are handing out apple pie, go get a slice," he said.
Without providing details, Mr. Duran said the valuation of United Capital informed his decision.
"This was the time to do it," he said, adding that he had recently purchased an apartment in New York, Goldman's home base. "So that was it."
Under the Goldman Sachs roof, the United Capital brand is likely to see changes, if not disappear completely, he said.
"As the CEO of United Capital, I'd be stupid not to take advantage of a brand that's a thousand times" larger than that of United Capital, he said.
"The reality is, the opportunity is vast and massive but not for United Capital," he said. "It's massive for a firm like Goldman Sachs."
In May, Goldman Sachs
announced that it was buying United Capital for $750 million in cash, in perhaps the most significant deal of a record year for RIA mergers and acquisitions. The deal was an opportunity for the storied investment bank to reach more high-net-worth clients, namely those with $1 million to $15 million in assets.
At the time the transaction was announced, United Capital had more than 220 advisers and $25 billion in assets under management. It also offers advisers a digital platform, FinLife CX.
Goldman's sweet spot was with the wealthiest of individuals, those with at least $25 million in net worth.
While the bank dominates the market for the wealthiest clients, including billionaires, Goldman Sachs is committed to the independent registered investment adviser, Mr. Duran said.
At Goldman's headquarters, "we are building out a whole area to help independent advisers compete because we think that the independent channel is a big part of our future growth," he said.
[More: Joe Duran: Why we sold to Goldman Sachs]
