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.
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.