Focus Financial takes stake in $1 billion wealth adviser

Northbrook, Ill.-based Relative Value Partners brings to 35 the number of affiliates of the deep-pocketed firm led by CEO Rudy Adolf.
JUL 13, 2015
Focus Financial Partners on Wednesday took a stake in a Chicago-area adviser managing more than $1 billion in assets. The deal for Northbrook, Ill.-based firm Relative Value Partners brings to 35 the number of firms that have affiliated with the deep-pocketed investor. The pace of deals has put the firm on track to deliver its best-ever year of profits, according to Focus Chief Executive Rudy Adolf, although that claim can't be verified because the company is privately held and won't disclose complete accounting figures. Focus last month said it had nearly doubled to $1 billion a loan from a consortium of banks. “The organization is scaling very swiftly,” said Mr. Adolf in an interview. Focus, founded in 2006, has been an aggressive investor in wealth management firms. Advisory firms who join Focus give up a share of their future revenues in exchange for cash and a stake in Focus. “It's a super-hot market right now for M&A of RIAs,” said Steven M. Levitt, co-founder of Park Sutton Advisors, an investment bank. “They clearly have a super successful marketing effort. They've been pulling off some deals with some very good people over the last few years.” Maury Fertig, who founded Relative Value Partners in 2004 with fellow ex-Citigroup Inc. and Salomon Brothers Inc. bond seller Bob Huffman, said the deal is “an important validation of what we've achieved as a company and an organization.” The deal will allow the firm to hire staff with additional financial-planning expertise and the ability to drum up new business. The founders no longer have the spare time to dedicate to those efforts, Mr. Fertig said. “We think we can improve our game,” he said. Mr. Fertig said his firm started to get courted by acquisition-hungry banks, private-equity firms and other financial advisers about three years ago, after it reached $600 million in assets under management. His firm's clientele includes well-heeled acquaintances the founders met during their time working on Wall Street. Financial-advice firms dealing in that milieu consistently win “a good multiple,” Mr. Adolf said, referring to the high values paid by the market. Terms of this deal were not disclosed.

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