CAPTRUST Financial Advisors LLC, a voracious acquirer of registered investment adviser firms, is looking to step up its growth even more.
Plump with an infusion of capital from its new private equity partner, GTCR LLC, the company now has the resources to scoop up much larger firms and continue to execute its strategy of "being unapologetically a growth company," said Ben Goldstein, CAPTRUST's Raleigh, N.C.-based president.
"The opportunities that we were seeing and that we liked were getting larger," he said, referring to the firms CAPTRUST would like to buy.
CAPTRUST by all measures is already huge. With $390 billion in assets under advisement, it surpasses rival firms that do both retirement plan and wealth management business. The mammoth RIA serves some 2,000 retirement plan sponsors with an average of $116 million in assets and has more than 700 employees and 43 offices around the country.
Still, it wants to get bigger. With sights on larger acquisitions to fuel additional growth, CAPTRUST in June broke with its tradition of independence and brought in GTCR, its first-ever private equity partner. GTCR bought a 25% stake in the company, committing to a minimum seven-year investment horizon. The investment valued CAPTRUST at $1.25 billion.
"We thought it was time in the maturation of our company to seek a great long-term equity partner," Mr. Goldstein said, adding that the company did not want to assume "an uncomfortable amount of bank debt" to take advantage of what he saw as a "massive opportunity" for consolidation among RIA firms over the next decade.
CAPTRUST has long self-funded its acquisitions, using company profits to buy them, according to Dick Darian, the Charleston, S.C.-based CEO of retirement M&A consulting firm Wise Rhino Group.
"To continue to grow, I think they felt they had to do more and bigger acquisitions," Mr. Darian said. "They wanted to make sure that they were able to identify the firms that they wanted, and they wanted to put themselves in a position where they didn't have to wait to acquire them."