Focus Financial engineers two year-end acquisitions by its subsidiaries

Focus Financial Partners is closing the year with a bang, announcing two acquisitions by its subsidiaries Monday that are expected to close in the first quarter of 2019. The Colony Group, a $6.3 billion firm based in Boston that has been a unit of Focus Financial since 2011, is acquiring Aurora Financial Advisors, a $404 million firm based in Wellesley, Mass. On the West Coast, two Los Angeles-based specialty firms are joining forces. Gelfand Rennert & Feldman, which has been part of Focus Financial since 2017, is acquiring WG&S. Focus described GR&F and WG&S as multifamily office and business management firms that specialize in working with celebrities and professional athletes. Focus Financial (FOCS), which raised $565 million through an initial public stock offering in July, has made it clear that these kinds of subsidiary acquisitions are a big part of the company's growth strategy. During both quarterly earnings calls since going public, Chief Executive Rudy Adolf cited 500 suitable registered investment adviser firms that potentially could join the 60 firms that currently make up Focus' partner network. "Providing access to capital and operational expertise is key in facilitating mergers and acquisitions," Mr. Adolf said in Monday's announcement. "Through M&A, clients always benefit from a broader range of services and deeper bench strength." In 2018, Focus closed eight direct transactions and 16 mergers by partner firms. But the financial markets have not yet embraced Focus, one of the few publicly traded access points to the financial advisory space. The stock is hovering around $25 on the last trading day of the year, down 22% from its $33 IPO price. Over the same period, the S&P 500 Index is down 10.6%.