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November 07, 2008 |
Fiduciary Network Buys Stake In Keats Connelly |
Fiduciary Network has acquired a minority interest in Phoenix-based Keats Connelly, a registered investment advisor firm specializing in providing cross-border tax advice to Canadian citizens and others living in the United States.
Three factors prompted CEO Dale Walters and Chairman Bob Keats to consider doing a transaction—succession planning, broadening ownership and obtaining a currency for possible acquisitions in the future. Walters says they entertained discussions with several acquisition firms.
Fiduciary Network’s non-voting stake is believed to be somewhere between 20% and 25%. Over time, that interest may increase but it will remain non-voting. “When I asked all the roll-up guys the question, ‘What’s in it for our employees and clients, they all had kind of a blank stare?’ ” Walters says.
Keats Connelly generates more than $5 million in revenue and employs 35 people, including several CPAs and attorneys specializing in areas ranging from taxes to immigration. Though it manages more than $300 million in assets, all of its revenues are derived from retainer fees. Walters says the firm’s largest clients don’t have a penny under management, but some pay retainer fees of between $100,000 and $200,000. Fully 95% of its clients are Canadian.
Several years ago it established Cross Border Tax & Accounting, a strategic business unit aimed at providing cross-border tax services to the middle market. This year that division opened a separate RIA and revenues have climbed 280%.
Fiduciary Network is a holding company launched by former Undiscovered Managers’ CEO Mark Hurley and New York investor Howard Milstein, whose interests include Emigrant Savings Bank and New York Private Bank & Trust. Over the past 18 months Fiduciary Network has acquired interests in various firms including Brightworth, Norcross, Ga.; Regent Atlantic Capital, Morristown, N.J.; Evensky & Katz, Coral Gables, Fla.; and Brouwer & Janachowski, Tiburon, Calif. |
Fiduciary Network Buys Stake In Keats Connelly |
