Bloomberg is reporting that Reverence Capital Partners is nearing a deal to buy independent broker-dealer Advisor Group Inc. from Lightyear Capital.
Investment banking sources said Reverence was likely to pay between $2.1 billion and $2.4 billion. Reverence is a private equity firm launched by Milton Berlinski, the former head of financial services investment banking at Goldman Sachs.
Lightyear was thought to be retaining an equity stake of 10 percent in Advisor group, the sources added. An agreement could be announced as soon as Thursday, Bloomberg reported, citing people with knowledge of the matter said. who asked not to be identified because the plans are private.
Advisor Group, which operates a U.S. broker-dealer network that includes more than 7,000 advisors offering sales, administrative, compliance support, technology and other wealth management services, attracted interest from a number of private equity firms and had come close to a $2 billion agreement with Centerbridge Partners LP, people familiar with the matter said last month.
American International Group Inc. sold Advisor Group in 2016 to private equity firm Lightyear Capital and the Public Sector Pension Investment Board of Canada for about $400 million. If completed, Lightyear and their Canadian partners could earn a return of 8 to 10 times their initial $200 million equity investment as the rest of the transaction was financed by debt.
Representatives for Lightyear, Advisor Group, PSP and Reverence Capital didn’t immediately respond to requests for comment outside of regular business hours, Bloomberg said. Advisor Group had $1.7 billion in gross revenue and $228 billion in assets under administration in 2018, both up 20 percent from a year earlier, according to its website.