When the PE Tempo Slows, Will RIA Sellers Miss a Beat? Not Necessarily.

When the PE Tempo Slows, Will RIA Sellers Miss a Beat? Not Necessarily.

by Jeff Nash, Founder & CEO, BridgeMark Strategies

Published July 26 on Wealthmanagement.com

Firms that have developed a structure to spur organic growth, not just through acquisitions, are the most likely to retain or boost their value.

Private equity continues to make its presence felt across industries as diverse as technology and infrastructure and, of course, wealth management. For an aging advisor demographic exiting the independent RIA space, the resultant elevation in prices and multiples has been a boon. Will it last? If you fall into Shakespeare’s “what’s past is prologue” camp, history shows that our industry has already seen PE come, make a splash and then go—think the robo advisor craze—and I expect that while PE will remain an active player for years to come, PE-driven consolidation activity may wane in the next 10 to 15 years.

Here’s what we know about PE investors. They are astute investors with an established and regimented modus operandi: get in early on a company’s growth cycle and get out as it starts to mature. When investing, they are equally disciplined in both their buy and sell decisions, which positions them to capture what can be massive multiples on invested capital.…Read More