The worlds of private equity and succession planning have collided, well sort of, in the latest goRIA podcast.
Comedian Johnny Hilbrant, who has built a huge social media following as “the PE guy,” takes aim at Chuck Failla, CEO of Sovereign Financial Group and host of goRIA over the latter’s long-term plans for his company. Failla has been vocal on social media, as well as speaking to InvestmentNews, about his reasons for “saying no to a VERY large check” from private equity.
“So Chuck, hi, I saw your LinkedIn post and I had to reach out to you – you said that you’re not selling Sovereign to PE private equity, I mean, you’re kidding right?” asks the PE guy in the podcast.
“I am not kidding, I am seriously not gonna sell to PE,” replies a bemused Failla, before describing his internal succession plan, which involves transferring some of his equity to Sovereign’s next-gen leaders. This, he adds, will secure Sovereign’s future and let him focus on doing what he loves, which is serving his personal clients.
“Oh, that’s adorable, but seriously, what is your plan?” asks Hilbrandt, who has racked up 253,000 followers on Instagram with his satirical take on the world of private equity. “Wait, so you’re really selling it to your employees - that’s, that’s just so community theater for me.”
In a significantly less tongue-in-cheek interview with InvestmentNews recently, Failla explained that it is important to him to maintain the culture of Sovereign. “I am not selling out, I am sharing the equity so that I can put some in the hands of the next generation,” he said. “The only way they will love Sovereign as much as I do is if they have equity.”
Sovereign, which recently surpassed $1 billion in assets under management, is not the only company eschewing private equity dollars over internal succession. RIA Ritholtz Wealth Management, for example, recently announced a succession plan that involves expanding the company’s equity structure to 29 employees.
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