Aequitas Capital has launched a new business unit, Aequitas Capital Partners (ACP), to provide growth capital -- both equity and debt -- for RIA firms. Launched in late July, ACP has already made investments in several RIA firms, including J Kristofer Behn’s Fieldstone Capital Management in Boston. Several more transactions are expected to be announced in the coming months.
At the same time, ACP is creating a national membership network of RIAs, called the Quarter Club, who are interested in investing high-net-worth client assets in alternative investments. Members reportedly will gain access to investment banking services, including acquisition sourcing, structuring and funding, as well as group insurance and exclusive resort recognition trips. Firms like Concert Wealth Advisors in San Jose, Calif., and Sica Wealth Management and Private Advisor Group, both of Morristown, N.J., have already qualified.
Ultimately, ACP envisions the Quarter Club becoming an organization like Tiger 21, which is a peer-to-peer learning network of affluent individual investors with more than $10 million who share ideas and leverage their collective assets to gain access to leading hedge funds and other alternative investments available only to institutions and individuals who are centi-millionaires. Collectively, Tiger 21 members control about $250 billion in assets. The Quarter Club is designed to perform research on various strategies and portfolio solutions by soliciting input from its members.
Aequitas Capital, the parent company of ACP, itself is a 21-year-old Portland, Ore.-based provider of private credit, private equity and merchant banking services to middle-market companies.
Keith Gregg, president of ACP, says there will be no requirement for RIAs who look to his unit for growth capital to purchase alternative investments from the parent company or other platforms that affiliate with it. However, given the nature of Aequitas’ business and that of affiliated firms like Concert and Circle Squared, he expects RIAs with a serious interest in alternatives to be among the most logical partners and candidates for investments.
Before launching ACP, Gregg himself was CEO and founder IEF Financial, a financial technology company. Prior to that, he held senior executive positions at First Allied Securities, Wachovia Securities (now Wells Fargo), and GE Capital.
ACP officials are well aware the space is becoming crowded. There are numerous other investors and consolidators in the RIA universe, ranging from United Capital to Mariner Holdings to Focus Financial Partners to Fiduciary Network. Most have different business models; some seek total ownership, while others want a controlling interest in the target firm while leaving the operators with enough equity to participate in the firm’s growth. Still others prefer to make only minority investments, reasoning that if owners of RIA firms takes most their chips off the table, they have far less incentive to grow the business.