Fisher Investments sells stake for up to $3B, but what happens next?

Fisher Investments has announced that two new investors will be taking a minority stake in the firm.

Ken Fisher started his eponymous investment business back in 1979 and today it, and its subsidiaries, manage $275 billion, centered across three principal businesses, Institutional, US Private Client, and Private Client International.

At the start of the year there were suggestions of a takeover bid from Boston headquartered global private equity firm Advent International with a source claiming that talks had started but that Ken Fisher did not want PE money and would more likely seek liquidity from sovereign wealth funds.

The announcement over the weekend is some way short of a takeover but Advent International is involved and set to take a minority stake along with a wholly owned subsidiary of the Abu Dhabi Investment Authority.

The deal values FI at up to $12.75 billion with Advent and ADIA investing between $2.5 billion and $3 billion.

"This transaction gives us the independent runway with truly exceptional institutional investors who can bring us their wisdom, value our unique culture and goals, and want us to keep doing what we've always done, bigger and better, while pioneering never yet done solutions to benefit our clients and employees,” commented Fishers’ CEO Damian Ornani.

Ornani will still be CEO and Ken Fisher will remain as chairman and co-CIO of the $275 billion AUM firm which will continue operating as an independent privately held investment adviser, wealth and asset management firm. The firm says there will be no impact on its more than 150,000 clients globally or its employees.

ENSURING INDEPENDENCE

Ken Fisher will sell personal holdings in FI to Advent and ADIA and will be the first outside investment in FI which has been solely owned by the family and employees. After the transaction closes, Ken Fisher will retain a majority of beneficial ownership and of voting shares exceeding 70%.

"This transaction is aimed dually at estate tax and planning purposes while assuring that FI will maintain its traditional culture, growth evolution and devotion to exceptional client service,” Ken Fisher said. “FI has been my life. While my health is excellent, this transaction with an atypically long holding period for a private equity transaction will ensure FI's long-term private independence and culture should anything untoward happen to me. And, we will have the support of world class partners who understand us operationally and culturally, and value what we are and will be."

For the two incoming investors, the deal was an opportunity for a long-term investment in one of the world's largest investment advisors.

"We are excited to be backing one of the top brands in financial services that is trusted by its clients for its personalized approach towards wealth management,” said David Mussafer, managing partner at Advent, who will have a seat on the FI board after closing. “Ken, Damian, and the rest of the management team have built a tremendous organization over the past 45 years. We're honored to partner with them in supporting FI's next phase of growth while upholding the company's unique culture that is core to its success."

The transaction is expected to close later this year, subject to certain approvals and the satisfaction of other customary closing conditions.