Chicago-based wealth management firm Segall Bryant & Hamill is acquiring Denver-based Denver Investment Advisors,
creating a nearly $20 billion investment management and advisory firm.
Segall, Bryant & Hammil is a 23-year-old firm with $12.4 billion under management. Denver Investment Advisors, which has history dating back to 1958, has $7.3 billion under management.
The firms are similar in that they both manage portfolio assets, as well provide financial advice for clients.
"The deal highlights the fact that an increasing number of wealth management firms are moving into the investment management side of the business once they pass over the $2 billion mark," said Daniel Seivert, chief executive of the investment bank Echelon Partners.
"These hybrid firms can oftentimes add even more value to clients as they often have greater control of the underlying investments," he added.
David DeVoe, managing partner of the consulting firm DeVoe & Co., said both companies will benefit from the added scale of the combined business.
"This acquisition will strengthen Segall Bryant's position in the marketplace," he said. "The transaction expands their geographic footprint further west, provides a new family of mutual funds and deepens their institutional and wealth management platforms."
Terms of the acquisition were not disclosed, but Mr. Seivert said the $20 billion in combined assets represents an "important threshold to surpass in terms of valuation and multiple expansion that comes with scale."
"While peak profit margins are no guarantee for firms of this scale, when they can be achieved, the combination with the higher multiple is a beautiful thing for wealth management entrepreneurs to realize," he added.
As the companies are combined, it is expected that the
Westcore Funds, which are advised by Denver Investments, will become part of the
SBH fund family, subject to shareholder approval.
The combined company will be named Segall Bryant & Hamill.
The transaction is expected to close in the second quarter of this year.
