Rush “Rusty” Benton, who founded WealthTrust LLC in 1997 to buy majority stakes in independent wealth management firms, is stepping down as chief executive of the company and will assume the new role of chairman, he said Thursday.
Rush “Rusty” Benton, who founded WealthTrust LLC in 1997 to buy majority stakes in independent wealth management firms, is stepping down as chief executive of the company and will assume the new role of chairman, he said Thursday.
Mr. Benton, 51, whose Nashville, Tenn., firm hasn't purchased an affiliate since October 2008, is handing the chief executive reins to Holly Deem. She joined the firm in early 2008 as chief operating officer from Invesco Ltd., where she had been chief operating and chief risk officer.
Mr. Benton plans to set up a new consulting firm, with WealthTrust as one of his clients.
WealthTrust, which has interests in 10 registered investment advisers, has been struggling since the financial crisis of 2008 and early 2009 to generate enough cash from its operating firms to pay debt and interest on preferred stock to its hedge fund and private-equity backers, people close to the company said.
“Going a year or two without making an acquisition is not a big problem for our business model,” Mr. Benton said in an interview last week. “We have survived a pretty horrendous downturn in the market, but we have the capital we need to support the business.”
WealthTrust recently renegotiated a multimillion-dollar senior debt payment to HBK Investments LLC, a Dallas-based hedge fund, and also has enough cash to help its affiliates expand and make good on upcoming commitments to owners of RIAs that have put options, Mr. Benton said.
This month, WealthTrust forced one of those executives — Scott Roulston, who was chief executive of Fairport Asset Management in Cleveland — to resign. Fairport, which oversees about $813 million of client assets, is the third-largest of WealthTrust's 10 affiliates.
Ms. Deem didn't return a call seeking comment.
Steve Fuldes, whose Fuldes Financial Management LLC in Miami was the last RIA firm purchased by WealthTrust and who has a put option on his remaining interest in his firm, said that he has been very satisfied with the parent firm.
“They've got some great people, and they've done everything and then some in terms of our relationship and back-office support,” he said. “Holly is very bright and very experienced.”
Mr. Fuldes, whose firm manages almost $400 million in fee-only accounts, has lost two of its four advisers since the sale to WealthTrust. But he said that he has replaced one and has seen “virtually no impact” from the departures on his economics.
In addition to owing more than $20 million in senior debt to HBK, WealthTrust also has mezzanine debt and preferred stock from Falcon Investment Advisors LLC, equity from private-equity firm Circle Peak Capital, and a remaining obligation to its former owner, Morgan Keegan & Co., the Nashville-based broker-dealer that holds a non-recourse seller's note.
Before starting WealthTrust, Mr. Benton served for 12 years as a founding partner of Barksdale & Associates, a Nashville-based investment management firm. He is a graduate of Vanderbilt University with a degree in economics.
In addition to her role at Invesco and its predecessor firm Amvescap, Ms. Deem has been president of Bank of America Private Investments, an investment management unit for high-net-worth investors, and of the bank's TradeStreet Investment Associates subsidiary for institutional investors, according to the WealthTrust website. She holds a B.S. in accounting from Western Illinois University.
