Southwestern Investment Group is latest RIA to partner with private equity

The Tennessee-based firm has sold a minority stake to Merchant Investment Management, citing the need to build scale in the fast-consolidating wealth management industry.

Southwestern Investment Group, a $5.8 billion registered investment adviser based in Franklin, Tennessee, has taken the plunge into a private equity partnership by selling a minority stake to Merchant Investment Management.

Like virtually all RIAs succumbing to the lure of PE capital, SWIG Chief Executive Jeff Dobyns said the move was about building scale in a fast-consolidating wealth management industry.

“In our search for growth partners, Merchant stood out with its deep, practical understanding of capital structure and a team of experts that truly understands how financial advisers serve their clients and thrive as businesses,” Dobyns said in a statement.

“Merchant’s flexibility in approach to equity and debt capital and willingness to go the distance with us has been one-of-a-kind,” Dobyns said.

Private equity investors have been flooding into the wealth management space with increasing momentum over the past several years, and Merchant has emerged as one of the higher-profile PE players ever since Matt Brinker joined as a managing partner a year ago.

“We jumped into this partnership with Jeff and the team because they are building an advisory firm that can sustain for decades to come,” Brinker said in the statement.

“Their approach to partnering young talent with experienced advisers, paired with firm ownership, allows SWIG to deliver high-quality financial planning and investment management services,” he added. “Everything we do at Merchant will be to preserve what makes SWIG great and help them lean even further into their strengths.”