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Why ought to an advisor who isn’t actively contemplating a sale or capital associate care about non-public fairness within the RIA area? As a result of, prefer it or not, non-public fairness is right here to remain. It’s not merely some development or fad: it represents a paradigm shift within the business that can form the expansion (and consolidation) of wealth administration companies for years to come back.
Unsurprisingly, the impartial area has turn out to be a treasure trove for personal fairness companies—and for a number of good causes.
- RIAs and personal fairness companies share a typical purpose: A deal with progress.
- RIAs are an ideal funding: They’ve excessive revenue margins, constant money circulation, and low capital wants.
- And ideally, non-public fairness companies and the RIAs they spend money on are inclined to work in partnership: An actual value-add for the RIAs, which may profit from the expanded enterprise information these companies deliver to the desk.
Within the case of Signature Property & Funding Advisors (or SEIA), the $19B RIA agency headquartered in Los Angeles and with workplaces throughout the nation, their progress was attributed virtually solely to natural means ever since their founding in 1997. But their imaginative and prescient was to broaden by way of inorganic progress and entice different like-minded advisors to turn out to be part of their extraordinary agency.
That’s the place non-public fairness agency Reverence Capital Companions got here in. Centered on investing within the monetary providers area, they see their relationships as strategic partnerships designed to foster progress.
Whereas some impartial agency homeowners nonetheless bristle on the considered promoting a bit of their enterprise, Mark Copeland, founding associate of SEIA, sees it a lot in a different way, as he discusses on this episode.
In Reverence Capital, he noticed a associate with a shared imaginative and prescient and the capital that may permit them to deal with reaching their imaginative and prescient for SEIA.
Likewise, Ben Prigal, Vice President at PE agency Reverence Capital, affords an identical perspective. In SEIA, they noticed a associate with an impressive enterprise, a powerful administration group, and substantial progress alternatives.
Collectively, they share either side of the capital partnership story on this particular episode with Louis Diamond, together with:
- SEIA’s imaginative and prescient—they usually recognized Reverence as the precise associate to realize their targets.
- Development and succession methods—and the way a non-public fairness agency’s funding can profit an RIA.
- Trying past capital—and the way a non-public fairness agency can present further worth to the impartial agency.
- Figuring out the precise companions—and the way each an RIA and personal fairness agency view a superb match.
The episode offers two attention-grabbing views on reaching progress and affords priceless recommendation on deciding when or if promoting a portion of the enterprise is the precise path to take.
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