Focus Financial pushes forward with blistering M&A pace in 2021

Focus Financial Partners Inc., a leading aggregator of registered investment advisers, had a blistering first half of acquisitions, with 17 RIA transactions closed or pending in the first seven months of 2021, according to its second quarter earnings released Thursday morning.

That pace of mergers and acquisitions, which Focus Financial breaks into two categories of "partner firms" and "mergers," would come close to matching 34 deals in 2019, according to the company, its best on record. In 2017, 2018 and 2020. Focus Financial Partners completed 25 such deals.

Partner firms are acquisitions and under the roof of Focus Financial while mergers are deals completed by the Focus partner firm satellites.

And Focus Financial sees no letdown in the future for M&A activity. There are close to 1,000 firms in the United States that could become partner firms and 5,000 firms that could become merger targets, according to a company presentation.

"Every time a market leader joins us, it not only strengthens our partnership and expands our global footprint, but also further validates the attractiveness of our value proposition," said Rudy Adolf, founder and CEO, in a statement. "As a result, our M&A pipeline is at record levels and continues to build, positioning us for strong growth and the creation of meaningful incremental and sustainable value for our shareholders.”

Adolf said in February he saw no slowdown to the red hot RIA M&A marketplace. Meanwhile, the firm also recently raised $800 million to fund its M&A pipeline, according to the company.

The firms Focus Financial acquires keep their own brand and may even use the mothership as a bank for their own deals.

The company reported for the three months ending in June total revenues of $425.4 million, 35.8% year over year growth, and net income of $5.2 million compared to $3.3 million for the same period last year.