Another private-equity firm has taken a big bite of the independent-contractor broker-dealer industry, with Lovell Minnick Partners LLC saying today that it and the management team of First Allied Securities Inc. will buy First Allied from its owner, Advanced Equities Financial Corp.
"Lovell Minnick has always believed pretty strongly that the value of distribution continues to increase, and that gets to the end client relationship," said Robert Belke, managing director with the
private equity firm. "We've had success in investing in firms on the distribution saide, but not necessarily inependent broker-dealers."
"We’ve spent a lot of time over the last several years looking at the independent broker-dealer space," he said. "We took a look at a number of transactions, some that happened and some that didn’t. First Allied has a highly efficient platform that is incredibily well run and managed.”
Mr. Belke added that the firm would continue to focus on internal or organic growth, but also could grow through recruiting other reps and would keep an eye on possible acquisitions.
First Allied will be the fourth large independent broker-dealer to be acquired by a private-equity firm in the past six years.
The first — and most notable acquisition — was
LPL Financial (now
LPL Financial Holdings Inc.), which Hellman & Friedman LLC and Texas Pacific Group purchased in 2005.
Last year, Lightyear Financial LLC acquired three broker-dealers from ING Groep NV and rebranded them Cetera Financial Group Inc.
In June, H.D. Vest Financial Services Inc., which is owned by banking giant
Wells Fargo & Co., said that it would be acquired by Parthenon Capital Partners,
Ranked by gross revenue, First Allied was the 22nd largest independent broker-dealer last year, generating $230.5 million, according to the most recent InvestmentNews survey of firms. The firm had $5.2 million in pretax earnings in 2010, according to that survey.
First Allied has about 1,000 affiliated independent representatives and financial advisers. Lovell Minnick focuses on companies in the financial services industry.
Terms of the deal weren't disclosed.
First Allied's chief executive, Adam Antoniades, didn't return a phone call seeking comment.
Advanced Equities is shedding First Allied's independent broker-dealer, registered investment adviser, wealth management, insurance services and pension services businesses. Upon the deal's close, First Allied will become an independent company and continue to operate under the First Allied banner.
Advanced Equities bought First Allied in 2005 from
Wells Fargo.
