The Carson Group announced today that private equity firm Bain Capital has bought out Carson’s original private equity partner Long Ridge Equity Partners, in a deal that valued Carson at more than $1 billion.
Carson manages $17 billion for more than 37,000 families. It has been an aggressive acquirer, talent seeker and now has 110 partner offices.
Ron Carson remains the Omaha, Neb.-based firm’s leader and majority owner. “The investment, along with a commitment to provide additional growth capital, will help [Carson] support its continued growth, technology development, and expansion by acquisition,” the Carson Group and Bain said in a joint press release.
Long Ridge, a New York firm, paid $35 million for a 29% stake in Carson in 2016. The $1 billion valuation suggests Long Ridge walked away with about $290 million and made more than seven times its original investment. Five years is often considered a typical holding period for a private equity firm. Bain is a multi-asset private alternative investment firm based in Boston.
Carson has been ambitious in offering a holistic advice experience that includes wealth management, portfolio management, tax preparation, estate planning and insurance, and the Bain investment was part of that goal, said a spokesperson. The firm offers its partner advisors back-office help, coaching and technology and at the same time it develops software tools and new financial products.
Ron Carson founded Carson Wealth in 1983 to serve high-net-worth individuals with portfolio management and wealth management. He went on to found Peak Advisors Alliance (later Carson Coaching) in 1993 and Carson Partners (formerly Carson Institutional Alliance). He’s cultivated and enjoyed a reputation as an Omaha version of a Silicon Valley innovator. He talks about luring talented but overwhelmed young advisor partners—people fighting fee compression and deluged by the need for a big tech spend—and offering them back-office help and digital tools. When he talks about the client experience, he evokes the names of Amazon and Apple to define the way people want their financial services seamlessly delivered. He’s even built a 200,000 square-foot campus in Omaha, two four-story glass buildings replete with a café and fitness center. (The construction continued through May and staff returned to the campus in June, said the spokesperson.) Carson is also an author.
He is often coming up with or investing in new tech and business solutions. Carson Wealth has invested in financial services and fintech companies including Acorns, Applied Systems, AvidXchange, Billtrust, Corvus Insurance, esure Group, FleetCor Technologies, Nets, Nexi, Passport, SigFig, SquareTrade, Vertafore and Worldpay. He also has expressed continued interest in retail banking services, an effort known as “Carson Cash,” to compete with the Wells Fargos of the world.
Carson said the point was that banks, law firms and CPAs were getting into the financial advice business, and everything was up for grabs since no one owned the comprehensive financial experience. “Banking, taxes all that stuff is an attempt to have a single pane of glass experience … think of a dashboard on a plane,” he said to Financial Advisor magazine in 2019.
He’s also said in the past that tech is one of the biggest drags on smaller firms’ bottom lines, and in 2020 said Carson Wealth was offering its partners free access to tech options like Salesforce, Orion and Smarsh.
Industry observers noted that the Carson valuation was bigger than United Capital’s; the latter company was sold to Goldman Sachs for $750 million in 2019 and is now seen by observers as part of Goldman’s broader effort to get into the RIA custody area. Carson said in several forums that he didn’t want to be rolled up into a Goldman Sachs the way United Capital was.
Carson moved his affiliation from LPL to Cetera in 2017.