RIA investors Wealth Partners Capital Group and HGGC have taken a minority position in Dallas-headquartered True North Advisors, a multi-family office advisory with $3.3 billion in assets under management, the firms confirmed.
The investment of undisclosed size will allow True North to accelerate a strategy of acquiring firms in Texas and the Southwest with $100 million to $1 billion in AUM, said Mark Gehlbach, True North’s president and co-founder.
Founded in 2000 by Gehlbach and Scott Wood, True North provides family office services to business owners, entrepreneurs and their families through wealth planning, investment management and business solutions such as exit optimization. In addition to its advisory services, True North also owns Western Alternative Strategies, an alternatives fund offering high-quality private investments available to its clients.
Gehlbach said the partnership with Wealth Partners and HGGC, which provides equity and M&A-focused staff, will bridge a gap between True North’s acquisitional ambitions and how many deals the firm has inked to-date.
“We tried to do it on our own, and we recognized it’s not a part-time job,” he said, adding that the most recent acquisition for True North was five years ago, and the one before that seven years ago. “In the firm, we’re juggling a lot of responsibilities. The relationship with Wealth Partners and HGGC will give us a dedicated, experienced resource.”
John Copeland, managing partner of Wealth Partners, said that True North will have its own M&A outreach team while it shares other services, such as legal, valuation, data screening and firm integration, with Wealth Partners’ five other RIA platforms: Waverly Advisors, Apella, MAI Capital Management, Merit Financial Advisors and EP Wealth Advisors. Combined, the firms have made more than 100 acquisitions since Wealth Partners’ launch in 2017.
“There is some overlap in that these firms are all fiduciaries, all client-centric, all planning-focused,” he said of the potential for “channel conflict.” “That said, all offer a niche. In True North’s case, Scott and Mark are very focused on Texas and the Southwest, the demographic for clients is $5 million and up, and they have an alternatives capability. Within our firm, that’s a very distinct offering.”
Copeland said that when sourcing deals for True North, the key criteria is less about size and more about cultural fit and capabilities.
“When Mark and Scott meet the team, they need to feel the value-add,” he said.
This was the latest of several deals that Wealth Partners and HGGC have made together, confirmed Neil White, HGGC president. His firm made the investment through Aspire Holdings, which has a pool of about $300 million for investment in RIAs. True North is Aspire’s fourth transaction.
“We set up Aspire because we saw so much opportunity in the RIA space, and for what we’re looking for, Mark and Scott are exemplary,” he said. “The first thing that attracted us was their values orientation and mission-based mindset. They want to help people with their financial health and help people meet their objectives. They represent teamwork and excellence and humility, and when you pair that up with market dynamics you can drive a tremendous business.”
Gehlbach said he’s hoping to see a couple of acquisitions in the next year, and then ramping up as the firm gets better at acquisition. In addition, he said, a “huge economic tailwind” blowing through Texas in the next 10 years will further allow True North to grow organically as well as through M&A.
“Texas is a funny market. It’s very relationship-driven, and it’s important to be from Texas. That’s why a Texas brand that’s been in the market for multiple decades is so important to meeting customer needs,” he said. “We’ve been through multiple major bull markets. Not many firms can say that.”