Lido Advisors makes first deal since BlackRock-backed buyout; acquires Michigan RIA

Los Angeles-based mega-RIA Lido Advisors has acquired Michigan-based RIA Exchange Capital Management, marking the first acquisition for Lido since it reportedly sold a majority stake to the BlackRock-backed private credit firm HPS Investment Partners. 

Lido Advisors was founded in 1999 and now manages roughly $30 billion in client assets. The firm has grown substantially in size since receiving backing from private equity, starting with Charlesbank Capital Partners investing in 2021 before Karl Heckenberg’s serial RIA minority-investing vehicle Constellation Wealth Capital joined Lido’s cap table in 2024. Lido started 2020 with $5.3 billion in assets, marking an astounding 466% increase to today’s AUM total.

BlackRock, the world's largest asset manager at over $11.5 trillion, announced in December 2024 it would acquire HPS Investment Partners for about $12 billion. HPS later announced May 21 it was investing in Lido Advisors, and Barron’s reported HPS acquired a majority stake. In an interview with InvestmentNews, Lido’s chief growth officer Jordan Greenhouse declined to share specifics on the structure of HPS’s investment. Last month's press release from Lido that announced its deal with HPS mentions Charlesbank, but notably does not mention Constellation Wealth Capital.

“If you look at a private equity investment after a number of years, the question is, what was CB’s [Charlesbank’s] plan, what are they thinking about?” said Greenhouse. “And that's when HPS came in. Charlesbank is going to continue their relationship with us. We love it, we’ve had a great relationship with them. And all this [HPS] does is expand our capabilities, the opportunities to think about putting our heads together, about where we want to go, because our core objective is to expand the footprint of the organization.”

BlackRock said it expects its HPS acquisition to close in mid-2025, pending regulatory approval. Greenhouse said private equity investors have been “patient” during Lido’s expansion efforts. Exchange Capital Management has $830 million in regulatory assets under management and will see all 13 staff members join Lido. 

“They've been very patient in regards to how we think about M&A. We think about M&A from an integration standpoint versus an aggregation standpoint, and reinvesting or investing even additional capital into other parts of our business, which is not only our investment platform, but our tax business, our trust business,” Greenhouse said.

Charlesbank has reduced its stake in Lido amid HPS becoming the firm’s majority owner, Lido’s president Ken Stern told Barron’s. Lido’s M&A moves so far this year have included its acquisitions of the $720 million Arizona firm Copperwynd Financial in May and the $870 million California-based RIA BluePointe Capital Management. 

“You look at private equity, there's only an acceleration in deals that you're seeing across the board, not even speaking specifically Lido, just across the industry. And I think there was speculation that when rates were going to go up, all of a sudden, you’d see [private equity investment] slow down. I don't think we've seen that play out at all,” said Greenhouse.

“I think the areas that people need to be aware of are, when you look at debt levels, we've always been very cognizant about how much we want to take on, how we think about deal activity, so we might look at it differently from our peers," Greenhouse said. "We've been very slow and methodical, thinking about the right geographies, the right cultural fit, really thinking about M&A from more of a partnership perspective, and how we can help each other grow and have a multiplier effect.”