Merchant Investment Management takes minority stake in $1 billion RIA

Inspirion Wealth Advisors, a $1 billion registered investment adviser based in Libertyville, Illinois, has turned to outside capital to help drive growth and set the foundation for a next-generation growth strategy. Inspirion has sold a minority stake to Merchant Investment Management, which holds minority interests in nearly 50 businesses that collectively amount to approximately $110 billion.

Inspirion launched in 2012 when co-founders Rich Kolb and Noah Seidenberg merged their advisory practices, and until now, its growth has been organic. While Kolb isn’t anticipating a string of acquisitions in the near term, he said Merchant will offer ongoing strategic guidance to help the RIA pursue its growth goals.

“This provided us an opportunity to bring someone in and expand our breadth a little bit,” he said. “We are setting up the firm for the long term, and we’re bringing in next-generation advisers into ownership structure.”

Kolb, 60, said the firm has three next-generation advisers, who range in age from mid-20s to early 40s, and the investment from Merchant will help to establish long-term commitments from those younger advisers.

“We want to tap into Merchant’s resources in terms of making connections and the best way to structure inorganic growth and not disrupt our operation,” he said. “We’re also looking for their help because we’re starting to move into the ultra-high-net-worth market, and we need some deeper resources available to help those clients.”

Merchant says its business is different from that of a traditional private equity investor that owns shares of private companies in pooled funds.

Tim Bello, Merchant managing partner, describes the company as an equity capital investor that is moving money from its balance sheet to the balance sheets of companies in which it has minority investments.

While Bello describes Merchant’s investments as “at least” 15- to 20-year commitments, Kolb said he appreciates that things can change.

In terms of Merchant eventually opting to sell its stake in Inspirion, he said, “It certainly could happen in the future.”

According to Bello, in its five-year history, Merchant has yet to sell out of an investment.

“The folks at IWA have already built a business that is head and shoulders above the typical RIA, with a strong core of financial planning, fiduciary service, and a commitment to next-generation talent and clients,” said Bello. “This is a firm that didn’t need help. It wanted a partner to invest in its independence and help it reach the next level.”