Taking the first step in a planned strategy of growth through acquisition, Chicago-based wealth manager Rothschild last week merged with Sentinus, an Oak Brook, Ill., independent investment advisor with about $750 million in assets under management.
With the merger, Sentinus CEO Phil Johnson became Rothschild’s president, and the combined firm now has nearly $5 billion in AUM. Sentinus will eventually rebrand as Rothschild.
Johnson said that while Sentinus, a comprehensive wealth manager, was not actively looking for this kind of merger, he said he always takes calls from people who were looking to invest, acquire or integrate.
“We were very happy with what we were doing on our own growth path,” he said. “But we were introduced to the Rothschild team through mutual acquaintances. We got to know the advisors over here and thought it was a good fit.”
Johnson said that at Sentinus he had made two acquisitions, and his experience management team was no doubt attractive to Rothschild.
Looking forward, Rothschild will continue to acquire smaller advisors, giving the firm a larger national presence, “but I wouldn’t say coast to coast,” he said.
“Our goal is to create a great platform,” he said. “One of the pillars of our inorganic strategy is to create succession opportunities for advisors. The industry’s getting older every day.”
Johnson said he currently sees his and the Rothschild role as one of building the wealth management brand, not necessarily of being an industry consolidator, though he added that sometimes there’s a fine line between the two goals.
“I’m going to say that cake isn’t 100% baked yet. We’re going to be more quality than quantity orientated,” he said. “It’s going to be one, maybe two transactions at most a year, whether it’s an acquisition of another existing firm, or a lift out of advisors from somewhere else.”
This growth through acquisition is aimed at bringing $250 million to $500 million in additional AUM annually to Rothschild, a firm that has been in wealth management since 1908.