United Capital Financial Partners Inc., which has been deploying capital raised from Bessemer Venture Partners and Grail Partners LLC to build a nationwide fee-based advisory network, has purchased Dunn Hogerty Investment Consulting Inc., an independent-brokerage practice in Fort Collins, Colo.
The wealth management team of Jerald Dunn and Dennis Hogerty has worked together since 1983 at Everen Securities Inc.,
UBS Financial Services Inc. and, most recently,
Wells Fargo Advisors Financial Network (Finet), according to filings with the
Financial Industry Regulatory Authority Inc. They left Wells in July to become the 31st practice to affiliate with United Capital.
“They have a long history as a team, are very obsessive about their clients and want to go almost entirely to fees,” said Joe Duran, chief executive of United Capital, noting that 100% of their approximately 300 clients have made the transfer.
Dunn Hogerty Investment Consulting oversees about $500 million in assets for individual investors and some small corporate retirement plans, he said. The firm has a staff of about 10 people, and one of the name partners is near retirement age and less active in terms of day-to-day activities.
United, which Mr. Duran founded in 2005, is one of dozens of so-called integrators, or roll-up firms, that surfaced during the past decade. Many stumbled in the financial crisis of 2008, as their constituent firms struggled while the parent companies' debt obligations to private-equity backers accumulated.
Unlike some consolidators, such as Focus Financial Partners LLC, which buy just a portion of firms, United purchases 100% of firms in return for some cash and partnership interests, and attempts to unify them under a common name, service platform and single ADV filing with regulators. The firm hasn't paid out partnership interests to date but hopes to do so through a public offering or sale “within the next couple of years,” Mr. Duran said.
The Colorado purchase follows acquisitions that United made this year of DFG Advisors in Ridgewood, N.J., and Capital Planning Group of Fort Lauderdale, Fla. United's firms have about $11 billion under advisement in 25 offices.
United has a definitive agreement to buy a fee-only registered investment adviser in Memphis, Tenn., that oversees about $500 million in assets, and will be announced imminently, Mr. Duran said.
The firm also is in the final stages of negotiations to buy practices in Albuquerque, N.M., and Philadelphia, as well as elsewhere in the Northeast. Mr. Duran declined to identify the state but said that the potential deal would be United's largest, adding assets under management of about $1.7 billion.
United last September raised $15 million from Bessemer, supplementing $21 million raised in earlier rounds from Grail and United's founding executives. The company has no debt and more than $15 million of cash on its balance sheet, making additional capital-raising rounds unnecessary, Mr. Duran said.
