Fo­cus Beefs Up With $16.5B RIA

A part­ner­ship with SCS Cap­i­tal Man­age­ment is the sec­ond deal for the ag­gre­ga­tor since Stone Point Cap­i­tal and KKR bought a ma­jor­ity stake.

Financial Planning - - RIA IQ - BY TO­BIAS SALINGER

FO­CUS FI­NAN­CIAL PART­NERS HAS ADDED AN RIA with $16.5 bil­lion in as­sets un­der man­age­ment, its largest part­ner firm ever, weeks af­ter se­cur­ing an in­fu­sion of cash from two pri­vate eq­uity com­pa­nies.

The RIA ag­gre­ga­tor has inked part­ner­ship deals with 10 firms this year and 48 since it launched 11 years ago. In the lat­est deal, the New York-based firm is set to ac­quire a ma­jor­ity stake in the rev­enues of Bos­ton-based SCS Cap­i­tal Man­age­ment, ac­cord­ing to an an­nounce­ment in May by Fo­cus.

The deal is the sec­ond one un­veiled by Fo­cus af­ter Stone Point Cap­i­tal and KKR agreed in mid-april to pur­chase a ma­jor­ity stake in the firm. The pri­vate eq­uity firms set Fo­cus’ value at $2 bil­lion, up from a val­u­a­tion of $750 mil­lion in its last ma­jor eq­uity sell-off four years ago.

SCS Cap­i­tal, Fo­cus’ new­est part­ner, usu­ally re­quires its clients to have a min­i­mum of $25 mil­lion in as­sets un­der man­age­ment, ac­cord­ing to its lat­est Form ADV brochure. Most clients in­vest in one or more of 14 pooled prod­ucts, in­clud­ing funds of funds and off­shore cor­po­ra­tions, man­aged by SCS.

$74 MIL­LION PER CLIENT AC­COUNT AV­ER­AGE

SCS av­er­ages $74 mil­lion per client ac­count. The wealth man­ager signed on with Fo­cus at a “per­fect mo­ment” for the firm, its CEO and co-founder, Pete Mat­toon, said in a state­ment. “We have been look­ing for a per­ma­nent cap­i­tal part­ner that pro­tects our com­mit­ment to clients and strong cul­ture,” Mat­toon said.

The firms did not dis­close the terms of the deal, which is sub­ject to clos­ing con­di­tions.

SCS man­ages more than $16.5 bil­lion across 224 ac­counts, ac­cord­ing to its Form ADV. HNW in­di­vid­u­als make up more than 75% of the firm’s clients, while less wealthy in­di­vid­u­als rep­re­sent an­other 10%. Founded in 2002, SCS has 77 em­ploy­ees, in­clud­ing 37 who serve in ad­vi­sory roles.

The firm dis­closed this year that it ad­vises three new pri­vate eq­uity in­vest­ment funds, two of which are based in the Cay­man Is­lands. Three other in­vest­ment ve­hi­cles linked to hedge funds and ad­vised by SCS dereg­is­tered in March ahead of sell­ing their re­main­ing as­sets.

Fo­cus has been one of the in­dus­try’s most ac­tive ag­gre­ga­tors this year. Led by CEO Rudy Adolf, Fo­cus added Bordeaux Wealth Advisors, a Sil­i­con Val­ley firm with $1.9 bil­lion in AUM, ear­lier in May.

In early April, the firm agreed to a part­ner­ship deal with Lake Street Advisors, a Bos­ton-based firm with $2.7 bil­lion in AUM.

To­bias Salinger is an as­so­ciate edi­tor of Fi­nan­cial Plan­ning, On Wall Street and Bank In­vest­ment Con­sul­tant. Fol­low him on Twit­ter at @Tobysalfp.

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