Fast-growing Chicago-based, multi-family office Cresset Asset Management is boosting its assets under management by more than 30% through the acquisition of Atlanta-based Berman Capital Advisors, a $4.7 billion firm founded in 2010.
The deal, which is being described as a merger with a “substantial equity component,” will push Cresset’s assets under management to around $20 billion when it closes within the next week.
Cresset was founded in 2017 by Eric Becker and Avy Stein.
In the merger-frenzy that has been enveloping the wealth management space for the past several years this one is unique in that it is a multi-billion-dollar deal that does not involve a publicly-traded RIA or any traces of private equity backing.
“We are absolutely not private equity backed,” said Becker. “This is a firm that was started by clients for clients, and it is very intentionally designed around employee ownership with a 100-year vision.”
In June 2020, Cresset acquired Reston, Virginia-based PagnatoKarp, a $2.3 billion RIA, but Becker said most of the firm’s growth has been organic and that the plan is not to become a serial acquirer.
“I wouldn’t say we’re on an acquisition program, but we’re always interested in culturally compatible organizations,” he said.
David DeVoe, managing director of DeVoe & Co., put the scale of RIA consolidation into context by explaining that more than half of the sellers in the current quarter have had more than $1 billion under management, which he said is about 30% above the historical average.
“This is a powerful combination; fortifying Cresset's position as a leading ultra-high-net-worth wealth manager,” DeVoe said. “Cresset has been a unique story, growing from an idea to over $20 billion in only four short years.”
Daniel Seivert, chief executive of Echelon Partners, described the Cresset acquisition as “powerful.”
“They have a very specific target profile and great discipline around only doing deals that match in terms of average client size and practices size which skews toward the larger end of the spectrum,” he said. “There aren’t many firms that come up for sale that match those criteria and there are plenty of other buyers that either have a platform in that size range or are looking to obtain one. As a result, the competition is stiff for these types of high-quality family office target.”
All 33 of Berman’s team members are joining Cresset Asset Management.
“Cresset is the partner we’ve been seeking to take our business to the next level, offer our clients an even broader array of services, and provide career development opportunities and increased ownership for our team,” said Justin Berman, founder and chief executive of Berman Capital Advisors. “We are excited to share with existing and new clients alike the truly holistic suite of innovative wealth management, family office and private investment offerings we can provide together,” he added.
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