Cresset Merges With Meristem to Create $27 Billion RIA

The fast-growing wealth management firm has attracted many advisors and clients and acquired few other businesses since it was founded in 2017.

Charlie Maxwell and Avy Stein (Courtesy photos)

Charlie Maxwell and Avy Stein

(Courtesy photos)

Cresset Asset Management, a $22 billion RIA headquartered in Chicago, and Meristem Family Wealth, a $5.2 billion RIA in Minnetonka, Minnesota, announced Wednesday that they have agreed to merge. The new company will be called Cresset Asset Management and manage a combined $27 billion, making it one of the largest independent RIAs in the country.

Terms of the deal, which is expected to close within 30 days pending regulatory approval, were not disclosed.

Meristem was not actively seeking a merger when Cresset approached the company 18 months ago, Cresset co-founder Avy Stein told RIA Intel.

“From our perspective, it was better to identify those great firms that were already out there and try to build relationships rather than just wait until something was for sale,” Stein said about his RIA’s acquisitions.

Cresset is always keeping an eye out for other wealth managers with similar cultures and expertise or businesses that would nicely compliment the RIA, Stein added. In Meristem, Cresset is gaining 42 professionals (all of Meristem’s employees), more than $5 billion in assets, the Meristem Trust Company, a South Dakota-based business founded in 2015, and an insurance review and risk management business.

“This gives us a wonderful opportunity. As you might suspect, you can do a lot more when it’s your business,” Stein said. All of the existing Cresset client trusts will remain with an outside trust company but advisors will be able to take advantage of the new businesses going forward, Stein said.

Meristem advisors are gaining access to Cresset’s outsourced family office, tax and estate planning, compliance, and outsourced CFO services. Cresset also has other healthcare, advocacy, and cybersecurity services for its client and advisors.

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“Cresset and Meristem coming together is an ideal partnership. We share a strong cultural alignment and a commitment to innovation, excellence, integrity, and results. Our offerings are complementary and together will provide significant benefits to our clients and our employees,” Meristem CEO Charlie Maxwell wrote in a statement.

Cresset has grown rapidly during the past 12 months. Last summer, when the company opened its first office in Los Angeles, it was managing just over $13 billion in assets. In September, when the company added two senior executives to its leadership team, assets under management had grown to $15 billion. Cresset’s regulatory documents filed Tuesday showed it managed more than $22 billion in assets for more than 1,500 clients. Meristem works with 781 clients.

There has been a record number of deals involving wealth managers in each of the past three quarters, according to Echelon Partners, a boutique investment bank focused on wealth management firms and TAMPs. The merger between Cresset and Meristem is one of the biggest deals involving wealth management firms this year, in terms of the assets a buyer or seller manages.

Some RIAs are growing fast primarily because they are acquiring other wealth management firms. A small group of private equity-backed wealth managers account for a disproportionate number of deals. Cresset is not one of them.

Cresset has made only two major acquisitions since it started. It merged with PagnatoKarp in June 2020 and Berman Capital in September 2021 (both firms that managed billions of dollars in assets). Cresset has also completed a few other smaller, tuck-in acquisitions but inorganic growth — through mergers and acquisitions — only accounts for one-third of the company’s overall growth since inception, Stein said. The RIA has identified several other potential acquisition targets but it does not plan on that organic-inorganic growth ratio changing, Stein added.

“It’s really important to us that the inorganic growth piece looks like our organic growth piece. In other words, it’s a great cultural fit,” Stein said.

Holly Deaton (@HollyLDeaton) is a staff writer at RIA Intel and based in New York City.

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