Mariner, Hightower deals pushing up assets per M&A transaction in 2023

Two of the largest private equity-backed consolidators of registered investment advisory firms unveiled acquisitions of billion-dollar companies, as the number of big deals outpaces last year.

In the first acquisition, Chicago-based Hightower invested an undisclosed amount into Orlando-based Resource Consulting Group, which has 13 certified financial planners and $2.5 billion in client assets. In the other, Overland Park, Kansas-based Mariner Wealth Advisors secured an agreement to acquire Boston-based Baystate Wealth Management, which has 13 financial advisors and other employees managing $1.8 billion in client assets. 

Each of the acquiring firms announced the deals last week without revealing financial terms. Mariner will officially close on its acquisition of Baystate, the firm's 98th office, on Jan. 1, 2024.

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The two firms represent a pair of the most active acquirers in wealth management, where the volume of transactions remains solid but at a slower overall clip than last year, according to investment bank and consulting firm Echelon Partners. 

The number of deals involving firms with at least $1 billion in client assets changing hands could reach as high as 130 by the end of the year after there were only 118 in 2022, the firm's latest quarterly M&A report showed. Average assets per deal rose 4% year over year to $1.69 billion in the first quarter.

"Assuming capital markets remain stable for the rest of the year, we anticipate that the average assets per deal for 2023 will surpass the levels seen in 2022, possibly even reaching the second highest annual level on record," the report said. "In addition to being buoyed by increases in AUM from investment results, 2023 has seen a large number of $BN+ AUM deals, which have contributed to the rise in average assets per deal. Top consolidators like Pathstone, Focus Financial [Partners], Wealthspire and Corient all announced at least one $BN+ transaction in 3Q23."

Hightower

Hightower, which is backed by Thomas H. Lee Partners and other investors, has struck at least 11 deals in 2023. It has 135 advisory practices managing $131 billion in client assets. The Resource Consulting Group brings a team of 30 employees with three certified public accountants, two attorneys and one chartered financial analyst in addition to the advisors.

"The Hightower partnership allows Resource Consulting Group to maintain autonomy and the firm's distinct identity while gaining the necessary resources to elevate our client service offering to new heights," Resource Consulting Group Founder Mike Davis said in a statement.

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Mariner received a minority investment from Leonard Green & Partners in 2021, and the firm has grown to $114 billion in client assets across its nearly 100 advisory offices. The incoming team, Baystate, is bringing its entire staff to Mariner as part of the transaction.

"The amazing team at Baystate, supported by our loyal client base, never ceases to amaze me," co-founder Thomas O'Connor said in a statement. "I am so proud of what this group of professionals has built, and joining Mariner Wealth Advisors is the natural next step to ensure they can continue building on our unique offerings to the industry while still putting the client first. This move will provide us with the opportunity to grow in ways we've never dreamed possible."