Fiduciary Network has purchased a minority interest in Gibson Capital Management of Pittsburgh. The transaction, completed in late December, marks the seventh such deal in less than two years for Dallas-based Fiduciary Network, a holding company formed by investor Howard Milstein and former Undiscovered Managers CEO Mark Hurley that buys minority interests in RIA firms and provides financing for second-generation partners to increase their stakes, as well as succession planning for the founders.
Formed in 1988 by CEO Brenda Gibson and Chief Investment Officer Roger Gibson, Gibson Capital manages about $700 million for about 100 clients in 20 states. Roger Gibson, a pioneer in the application of institutional-style allocation strategies to individual investor portfolios, cites several motivations for entering the transaction.
"One key factor was my advancing years," he jokes. "I'll be 58 this spring and don't have any retirement plans and fully expect to be active for the foreseeable future. But we need to start thinking about succession planning."
In the first quarter of 2009, Gibson Capital also plans to expand ownership to a number of employees with Fiduciary Network's financing. The firm's goal is to manage its growth so it can maintain its advisor-to-client ratio. At present, three advisors manage the firm's relationships with 100 clients.
"This was an opportunity to monetize part of the business in ways other competing models don't do as effectively, and provide an opportunity to gradually expand ownership internally," Gibson says. "I believe Hurley has built a better mousetrap."
Terms of the transaction were not disclosed, However, in most of its
deals, Fiduciary Network typically acquires an interest ranging from
10% to 30% of an RIA firm.