Private equity is knocking. Who should be in your corner?

No discussion of today's RIA transaction market is complete without addressing private equity, which has become one of the dominant sources of acquisition capital in the industry.

PE-backed acquirers — platforms built specifically to aggregate advisory firms — have become one of the most active buyer categories in the market. They move quickly, often have pre-built diligence processes, and can offer headline valuations that compare favorably to strategic acquirers. They are a legitimate part of any competitive process.

Most RIA founders who get a call from a PE-backed buyer think the hard part is evaluating the offer, but in reality, the more difficult part is figuring out whether the person helping them evaluate it actually knows what they're looking at.

But PE deals introduce structural considerations that require specific expertise to evaluate. Earnout provisions in PE transactions tend to be more complex. Equity rollover arrangements (where the seller takes a stake in the acquiring platform) involve a different risk calculus than cash at close. Governance rights, operational integration timelines, and cultural fit with an aggregator model all deserve scrutiny that goes beyond headline price.

A business broker is unlikely to have the sophistication to fully evaluate a PE offer against a strategic alternative, model the equity rollover economics, or negotiate the nuances of earnout structures. An investment banker who works regularly with PE buyers, while understanding how to use PE interest to create competitive pressure on strategic buyers, is positioned to do all three.

For some founders, private equity may represent the most attractive path forward. For others, a strategic acquirer may offer a better cultural fit, integration model, or long-term outcome. The key is ensuring the decision is made deliberately and with a clear understanding of the tradeoffs involved.

The rollover 

Equity rollover is one of the most consequential decisions in a PE transaction, though it gets far less attention than it deserves.

When a seller rolls equity into an acquiring platform rather than taking cash, the value of that stake depends on things that are genuinely hard to assess from the outside: the platform's growth trajectory, the terms governing when and how that equity can be liquidated, and the governance rights attached to it. A founder rolling at an attractive multiple may be taking meaningful concentration risk into a single privately held company with limited exit options.

Working through that tradeoff requires financial modeling and real familiarity with how PE platforms structure these arrangements. It is not something a volume-oriented brokerage is equipped to provide.

Making the decision deliberately

For some founders, private equity represents the most attractive path forward. For others, a strategic acquirer offers a better cultural fit, a cleaner integration model, or a long-term outcome that makes more sense for their clients and their team. The key is ensuring the decision is made deliberately and with a clear understanding of the tradeoffs involved.

Before engaging an advisor for a process where PE buyers are likely to be in the room, founders should ask several direct questions:

• Do you exclusively represent sellers, or do you also advise buyers?
• Are there any existing relationships with acquirers, broker-dealers, or custodians that could influence which buyers you approach or prioritize?
• How do you approach private equity buyers relative to strategic acquirers?
• Who will lead this engagement on a day-to-day basis, and at what level of seniority?
• How is your compensation structured, and what outcome does it incentivize?
• What experience do you have advising firms of comparable size and complexity?

The answers often provide an early indication of how the engagement will be managed, what incentives are driving the process, and whether the advisor's approach aligns with the seller's objectives.

A defining decision

Selling an RIA is among the most significant events in a founder's professional life.

Strong markets can mask process deficiencies. When buyers are plentiful, many transactions will close regardless. The more important question is whether the seller achieved the best available outcome, not simply a successful one.

The founders who tend to come out ahead approach the sale with the same discipline and intentionality they applied to building their businesses. That starts with choosing an advisor who understands not just how to close a deal, but how to evaluate every path available — including the private equity ones.

For a transaction most founders will execute only once, that level of representation isn't a secondary consideration. It shapes every stage of what follows.

Ryan Kaminski is a co-founder of Green Sail Capital Partners and is based in Chicago. He has over 10 years of experience in investment banking and M&A advisory, with a focus on sell-side engagements and capital raises.