Arete Wealth, a national independent broker-dealer, registered investment advisor, and insurance firm headquartered in Chicago, has completed its previously announced acquisition of Center Street Securities, a Nashville-based securities broker-dealer with $1.04 billion in client assets, the companies said earlier this week.
Center Street was founded in 1990 as Elliott Financial Services. Current CEO Jack (JR) Thacker purchased the firm in 2007 and renamed it Center Street Securities. By 2009, the firm had grown to 100 financial advisors.
Now that the transaction has closed, Arete Wealth will have a total of $5.7 billion in assets under management (AUM) and 265 registered representatives nationwide—a 75% increase. The deal will also grow Arete Wealth’s revenue by 40%, the company said.
Although financial details of the transaction were not disclosed, Arete Wealth said in the news release that its acquisition of Center Street was a stock purchase transaction. “We are incredibly excited about the potential this partnership unlocks for us in the years to come because we believe we can move faster together than apart,” Arete Wealth founder and CEO Joshua D. Rogers said in a news release announcing completion of the M&A transaction.
According to Rogers, Center Street’s strong belief in endowment-style investing for high-net-worth clients is consistent with Arete Wealth’s investment philosophy, and complements his firm’s industry-leading position as a provider of bespoke alternative investments.
Rogers discussed his firm’s unique investment offerings and plans for the two combined companies in an email response for comment.
Private Wealth asked Rogers to define the term “bespoke alternative investments,” and how Arete Wealth’s M&A deal with Center Street advanced its position as a leader in providing them.
“Bespoke alternative investments are mostly private securities that have been carefully selected, or in some cases crafted, by Arete Wealth together with family offices and institutional quality sponsors,” he said. “For high net worth retail investors, these are investment opportunities they would not be able to access anywhere other than from Arete Wealth.”
According to Rogers, an example of a bespoke alternative investment might be a structured note, sometimes referred to as a “hybrid security” because it combines the features of multiple financial products rolled into one.
“While these are risky for the average investor, structured notes offer retail investors the features of both debt assets and investment assets,” he said. “Arete Wealth partners with multiple platforms and financial partners on structured notes—in some cases, where the partner will craft new offerings exclusive to Arete Wealth investors.”