M&A Among RIAs Has a Record Third Quarter

Deals in the third quarter were 32 percent higher compared to last quarter, according to a new report by Echelon Partners.


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RIA mergers and acquisitions had a record third quarter. The quarter was also the fourth most active in the industry’s history, according to Echelon Partners, an investment bank and consulting firm focused on wealth and investment managers.

There were 86 deals in the third quarter of 2023, 32 percent higher than the second quarter. The deals represented assets of $1.1 trillion. Echelon expects total deal volume this year to reach 315, up slightly from last quarter’s prediction of 300 deals but still lower than the 341 transacted in 2022.

Echelon said economic optimism among buyers and sellers as capital market conditions started to improve in early 2023 drove M&A growth this quarter. Most transactions take on average nine months to complete, according to the investment bank.

Strategic acquirers accounted for 90.6 percent of transactions in the third quarter. However, this quarter also included a wide range of buyers from private equity firms and insurance companies to pension plans and asset managers. Goldman Sachs was both a buyer and seller in the quarter’s top deals, acquiring a stake in World Insurance Associates, via GSAM, and also selling Goldman Sachs Personal Financial Management to Creative Planning.

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Investment in wealthtech remained high with 30 transactions, including Farther’s recent capital raise led by Lightspeed Ventures, which more than doubled the valuation of the firm to $131 million.

Twenty-five of the 86 deals involved RIAs with more than $1 billion in assets under management, a slower rate than the 36 similar deals in the second quarter. However, the acquisition of $1 billion and over firms is still on track to outpace 2022 levels this year by 10.2 percent, based on year-to-date data.

Despite the slight slowdown in $1 billion-plus AUM transactions in the third quarter, the 2023 year-to-date average deal size remains higher than 2022 levels, with 4.3 percent year-over-year growth in average assets per deal.

Echelon attributes this increase to the growth of equity markets and the consistent deployment of newly raised capital by firms like Mercer Advisors, HUB International, and Captrust. Large wealth platforms raised an estimated $7.2 billion to pay down debt, increase war chests for acquisitions, and invest in growth, according to Echelon.

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