As Orion Advisor Services crosses a major milestone for its business, the turnkey asset management platform and adviser technology vendor is facing renewed rumors that it is up for sale.
TA Associates, the private equity firm that acquired Orion (formerly known as NorthStar Financial Services Group) in 2015, is reportedly working with Raymond James to sell Orion for $1.875 billion, according to Barron's.
Raymond James and TA Associates did not respond to requests for comment.
Orion founder and CEO Eric Clarke acknowledged the amount of discussion and speculation about a deal has ramped up, but he could not confirm the reported price tag. No formal process for an acquisition has started, Mr. Clarke said.
It’s a natural discussion for any company backed by private equity after five years, especially one that's had the kind of success Orion has, he said.
“I can’t hardly go to a conference without having someone talk about it or comment on it or speculate about it,” Mr. Clarke said. “There’s not a day that goes by that I don’t get a call from a private equity firm or someone else who’s interested in investing in our business.”
The firm announced on Thursday that it now works with more than 2,000 independent advisory firms with a cumulative $1 trillion in assets on the Orion platform.
“When you achieve this type of scale, the amount of interest certainly increases,” Mr. Clarke said.
Orion’s recent acquisition of financial planning startup Advizr and the improved client experience the technology brought along is helping push Orion past the $1 trillion threshold, Mr. Clarke said. More than a quarter of advisers on Orion are leveraging Advizr’s technology to win new business, Mr. Clarke said.
The company underwent a major rebranding in 2019, changing the name of parent company Northstar, which also owns FTJ FundChoice, CLS Investments and Constellation Trust, to Orion Advisor Services.
Beyond branding, acquisitions and new products, Mr. Clarke said Orion’s success rides the growth of the independent advisory market. With the shift from traditional brokerage models to a fiduciary advice model showing no signs of slowing down, there should be no surprise that people want to invest in the industry, Mr. Clarke said.
He points to deals like LPL’s acquisition of AdvisoryWorld and Goldman Sachs buying United Capital as evidence that traditional broker dealers recognize the need to embrace new independent advice.
Mr. Clarke wouldn’t speculate on a potential buyer for Orion. But he expects there will be continued investments in technology vendors like Orion from financial sponsors like private equity firms.
“Capital is flowing into this space and as a result of that, there will be a lot of continued strength and momentum,” he said. “It’s a lot more exciting to be in this space today than certainly 20 years ago when I started this business because we couldn’t find a system to just do our performance reports.”
Also, Orion has added BlackRock, Fidelity, and Vanguard to its custom portfolios suite, and RedBlack has set up a new headquarters after crossing a trillion-dollar milestone.
Also, New York-based Legacy Edge Advisors names its first-ever CEO, while Novare Capital Management hires a Vanguard veteran with a multigenerational planning focus.
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