AlTi Global, a publicly traded wealth and alternatives manager with more than $70 billion in AUM, announced on Monday that it is acquiring New York–based East End Advisors, which manages about $5.6 billion in assets for ultra-high-net-worth families and foundations.
While the initial purchase price was set at about $76 million, AlTi will pay an additional undisclosed contingent amount payable over five years that will be calculated using a formula based on earnings before interest, taxes, depreciation, and amortization. Some of the contingent amount must be paid in cash, with the remainder paid in either cash or Class A stock. The initial purchase price is expected to be funded by a $115 million investment round from Constellation Wealth Capital that closed last week. Additional terms of the deal were not disclosed. The acquisition is expected to close early in the second quarter of 2024.
Constellation’s investment was part of a $450 million investment in AlTi by Constellation, a private equity investor focused on wealth management firms, and Allianz X, the investment arm of German financial services company Allianz SE. According to the companies, the remaining capital will be “used to accelerate AlTi’s strategy to become the leading global independent wealth management platform for the UHNW segment, with targeted expertise in alternatives.”
“We have long admired the exceptional team at East End, their investment approach, and the long-standing and trusted relationships they have with their clients,” Michael Tiedemann, chief executive officer of AlTi, said in a statement. “We both share industry-leading client retention and a deep understanding of the complexities and changing demands of ultra-high-net-worth families and foundations.”
With the acquisition, the companies said, AlTi expands its reach into “key regions within the U.S.” and in the outsourced chief investment officer (OCIO) market, which has seen impressive growth in recent years. Wealth and asset management research and consulting firm Cerulli Associates projects that growth will continue, at an annual rate of 5.6 percent and reaching $3 trillion by the end of 2026.
“We are confident that AlTi’s global platform will benefit East End’s clients through increased access to global perspectives and solutions and that together we will be able to provide a broader range of compelling ideas and opportunities,” David Salomon, president of East End Advisors, said in a statement.
In recent years, both mergers and acquisitions and private equity investment in wealth management have boomed.
The first two months of 2024 saw a 20 percent increase in M&A over the same period in 2023, according to DeVoe & Company, a consulting firm specializing in M&A and wealth management companies. Private equity also continues to play an outsized role in RIA M&A with PE firms directly or indirectly involved in 61.1 percent of transactions recorded last year, according to investment bank Echelon Partners.
New York–based AlTi Global operates various subsidiaries around the world under the brand name AlTi Tiedemann Global.
