Rudy Adolf discusses Ukraine invasion on Focus earnings call

Before discussing the details of Focus Financial Partners Inc.'s first-quarter earnings with analysts Thursday morning, Rudy Adolf, the firm's founder and CEO, who's a native of Austria, took the unusual step of describing the Russian invasion of Ukraine as a tragedy.

Heads of U.S.-based financial services companies typically want to avoid making statements that discuss politics or veer from the norm, in this case a discussion of quarterly earnings, the number of firms acquired and the industry as a whole. Such statements draw too much attention, executives fear.

But Adolf. who launched the adviser aggregator Focus Financial Partners in 2006, went out of his way to speak about the war in Ukraine.

“Before getting into the details of the call, I want to take a moment to reflect on the geopolitical events that have unfolded in recent weeks," he said. "As a native European, this unimaginable tragedy hits particularly close to home. We must all acknowledge the bravery, sacrifice and spirit of the citizens of Ukraine in the face of such inhumane and unprovoked aggression."

In an interview later Thursday, Adolf said he didn't want to come across as callous by highlighting only company results during the call but wanted to provide the appropriate context to the earnings call and provide that context to the listeners.

On earnings calls for European-based companies, such discussions are much more prevalent, he said. "Remember, we are not talking only to investors and analysts, but there are plenty of others on the call, prospects, partners, large clients. Vienna is just a 90-minute flight from Kiev."

Focus Financial Partners reported first-quarter revenue of $536.6 million, an increase of 36.1% compared to the same period last year. Adjusted EBITDA — earnings before interest, taxes, depreciation and amortization — for the quarter was $135.1 million, a 33.7% increase.

Also during the earnings call, Focus Financial highlighted its recent announcement that it had signed its first partnership deal with a Swiss wealth management firm, Octogone Holdings, with about $5 billion in assets. The pipeline for mergers and acquisitions is robust and momentum remains strong, Adolf said.

Focus Financial Partners started looking at the Swiss adviser market two years ago, he said. The more than 2,000 firms control half a trillion dollars in assets, and Switzerland has a new registration requirement for advisers similar to the Securities and Exchange Commission's Form ADV that will force many Swiss firms to sell or merge.

"A new regulator in Switzerland requires the registration of every single asset management firm and high level of disclosures," Adolf said. “It's really shaking up the market there.”