Creative Planning CIO warns of short-term private equity flips

Peter Mallouk has built Creative Planning into an RIA powerhouse while retaining majority ownership and selectively bringing in private equity partners. At a Goldman Sachs event on Friday, Creative Planning’s chief investment officer Jamie Battmer positioned that structure as a competitive advantage - contrasting it with the short-term churn from private equity owners.

“If you're wanting someone to just write you a gigantic check and sail off into the sunset, someone's going to overpay for your stuff right now. But those firms in turn are going to be sold within the next two or three years,” Creative Planning’s Battmer said. “And if you're fine with that pipeline to maximize earnings, you'll rock on. But if you're wanting the tools to just take your practice to the next level, you have to focus on the firms that are going to be a good partner in allowing you to do that.”

Battmer, who was speaking on a panel at the Goldman Sachs’ RIA Professional Investor Forum in New York, added that Creative Planning now manages approximately $400 billion in assets. Creative Planning managed just $34 billion when Mallouk bought the firm in 2004. “It's the Golden Age, we're all blessed that this is where we are, what we do for a living, and that the sun is shining on the transition towards the RIA space,” Battmer told the conference room on Friday.

Creative Planning is now among the largest RIA aggregators in the space, with Mallouk maintaining roughly 80% of Creative Planning. Private equity firm General Atlantic bought a minority stake in Creative Planning in 2020 and TPG did the same in 2024, while Creative Planning began offering equity to employees in 2021.

“People that own something, they treat it better than if they're renting it. And so the more you can turn all your employees into owners, the better,” said Battmer. “The way you can reward people, if they're the top performers - the top advisors, top executives, or they're the top janitors - and allow them to come into that ownership structure within the company, you just get people that are going to pick up trash in the stairwell, and that's what you want.”

Battmer was joined on his panel alongside Circle Wealth Management partner John Chrin and Bleakley Financial Group’s COO Vincent Nauheimer. Bleakley, an RIA with $10 billion in AUM, sold a minority stake last year to Joe Duran’s private equity-backed Rise Growth Partners.

“I think people have lost sight within the RIA world that there can be periods of extended bear markets. And what happens in that type of period where it's not just a year or a quarter, [but] where you have a multi-year period, three four years, where markets are down,” said Chrin.

Circle Wealth was founded in 2007 by Maria Chrin. The husband-wife tandem of John and Maria now oversee $13 billion in assets at Circle Wealth while prioritizing organ growth without private equity capital or significant M&A transactions for other RIAs.

“As someone who owns a business, if you do a transaction with private equity, remember your remaining equity in the business isn't top of the capital structure stack, it's going to be the bottom,” said John Chrin. “So the private equity guys are going to get paid first. And what you think you have, you may not have in terms of the sub-equity position because of the eating into each year that happens in terms of revenues being down.”