All options are on the table for Cetera Financial Group. The parent company which owns a network of six independent broker-dealers confirmed it is retaining investment bankers to evaluate its capital structure and examine specific capital allocation issues.

Earlier reports from investment banking sources in FA said the firm reportedly was close to selecting Goldman Sachs & Co. to explore strategic alternatives for the firm's capital structure. An announcement about the advisor is expected next week.

Since emerging from bankruptcy in 2016, after it was recapitalized by private equity firms, Cetera Financial Group has performed beyond most reasonable expectations for a once-bankrupt B-D. Very few broker-dealers manage to enter bankruptcy and resurface as viable, independent entities. Most are absorbed into other B-D firms willing to assume certain liabilities only at firesale prices.

According to sources in the private equity world, Cetera initially was looking to swap higher-cost debt for less expensive capital. However, they added that some major investors who invested in a bankrupt Cetera in 2016 wanted to explore selling,or at least repricing, their stakes, given its financially impressive turnaround.

Cetera went bankrupt in early 2016 and its pre-bankruptcy shareholders were wiped out. The firm quickly emerged from Chapter 11 after it was recapitalized by a number of private equity investors, including Carlyle Group, Fortress Capital and investment management firm Eaton-Vance.

Today, Cetera reportedly has more than 20 shareholders, but none own more than 20 percent of the firm. Most, including senior creditors who received equity for their debt, own less than five or seven percent of the Cetera network. Given such a broad dispersion of ownership, there is likely a wide disparity of investment objectives among Cetera's owners.

More than a few private equity firms have underperformed, so they might want to cash out to impress disgruntled investors, sources said. Other investors may be satisfied and want to let their profits continue to climb.

Cetera said early on Friday it was examining its capital structure "continuously." Investment banking sources said the exploration of options could entail a change of control of the B-D network or a smaller transaction.

In a prepared statement, the firm said, "We are undertaking this capital structure review from a position of strength, having generated robust financial performance and built up a solid balance sheet since the successful conclusion of our restructuring in the first half of 2016."

Earllier in the day, a Cetera spokesperson described the process as part of the normal course of business. Interest rates are rising so bankers said Cetera understandably wants to refinance its debt and lock in better interest rates.

“We’re pleased with the strength of our financial performance and balance sheet since our emergence from the restructuring process," a Cetera spokesperson said. "Like all healthy companies that seek to sustain their trajectory of success, we continuously examine ways to enhance our capital management structure to best align it with our ability to reinvest in our business and create added value for our advisors and other stakeholders.”

Ownership of Cetera, one of the largest networks of independent broker-dealers, has changed hands several times in the last four years. In January 2014, Nick Schorsch’s ill-starred Realty Capital paid an eye-popping $1.1 billion to purchase Cetera from Donald Marron’s Lightyear Capital. A year later, Realty Capital became mired in an accounting scandal and Schorsch's debt-laden empire collapsed, taking Cetera with it.

One investment banking source said at least one of these firms pushed Cetera's board to explore a partial sale of their own stake. Private equity firms that once looked to exit their investments via initial public offerings are now increasingly looking at other alternatives, including keep firms private and selling equity positions among themselves.

This allows them to mark up the value of their investments. Given that Cetera reportedly has performed surprisingly well since emerging from bankruptcy, one or more of its investors, some of which may have viewed the 2016 equity infusion was a quick turnaround opportunity, might want to test the market, sources added.

Cetera CEO Robert Moore served as CFO of LPL Financial in 2010, when LPL, the nation’s largest independent brokerage did an initial public offering via several investment banks, including Goldman Sachs. Moore succeeded Larry Roth as Cetera CEO in 2016 shortly after the firm emerged from bankruptcy. The fact that Cetera managed to survive bankruptcy as a standalone entity is almost a unique achievement in the history of the brokerage business.

In an interview in late January, Moore said that Cetera had managed to add an impressive 784 new advisors overseeing nearly $15 billion in assets during 2017. Cetera also managed to retain 95 percent of its advisors after losing a much higher number of them during the bankruptcy process. To streamline operations he also restructured its number of B-Ds in the Cetera network, reducing them from 11 to 6.

Moore also said the firm managed to reduce its aggregate debt-to-earnings ratio by over three times. This presumably would allow it to refinance much of its debt at a far lower cost than when it emerged from bankruptcy. Moore also said the firm's restructuring was two years ahead of schedule.

All this would point to a much higher valuation for Cetera than immediately after it came out of Chapter 11.