Sequoia Financial Group, a $4.7 billion RIA based in Akron, Ohio, has joined the trend in the wealth management space of partnering with private equity investors.
Sequoia announced Tuesday that it sold a minority stake to passive investor Kudu Investment Management, which has investments in 13 wealth and asset management firms and is owned by its employees and White Mountains Insurance Group.
Leon LaBrecque, Sequoia’s chief growth officer, said the decision to take private equity capital is part of a “durability plan.”
“We need a sustainable capital pool,” he said. “When you get to a certain size it’s difficult to create a market for ownership shares. Bringing in an institutional partner gave us the opportunity to let employees still buy shares.”
In addition to helping to diversify the ownership structure, the PE partnership will also enable Sequoia get involved in the merger and acquisition trend.
“We want to do some bigger deals,” LaBrecque said. “We think this whole world has changed so much in last 120 days, and we’re going to see some great opportunities.”
Despite managing nearly $5 billion, Sequoia has not been among the more aggressive buyers in the wealth management space. The firm has made just five acquisitions over the past 15 years, the most recent of which closed in early 2019 when Sequoia acquired LaBrecque’ s firm, LJPR Financial Advisors.
Sequoia is majority-owned by employees and continues to be led by Tom Haught, founder and CEO.
“In our pursuit of building an enduring firm, we are creating generational capital that will strengthen us now and offer durability and continuity for the future,” Haught said. “Kudu’s investment will help accelerate our U.S. expansion plans and support our mission, which is to be our clients’ most trusted adviser.”
While industry statistics pointing to a succession crisis can cause alarm, advisor-owners should be free to consider a middle path between staying solo and catching the surging wave of M&A.
New joint research by T. Rowe Price, MIT, and Stanford University finds more diverse asset allocations among older participants.
With its asset pipeline bursting past $13 billion, Farther is looking to build more momentum with three new managing directors.
A Department of Labor proposal to scrap a regulatory provision under ERISA could create uncertainty for fiduciaries, the trade association argues.
"We continue to feel confident about our ability to capture 90%," LPL CEO Rich Steinmeier told analysts during the firm's 2nd quarter earnings call.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
