Chicago-based HighTower announced on Tuesday that it will purchase Salient Private Client, the wealth management business of Houston-based Salient Partners, in its largest single-office acquisition to date.
The transaction will add $4.5 billion in client assets, bringing HighTower’s AUM to $55 billion.
“Salient Private Client is one of the true jewels in the marketplace,” said Elliot Weissbluth, CEO of HighTower, in a statement. “We are honored to welcome their stellar financial advisors and clients to the HighTower community and look forward to learning and sharing with them as we help change the shape of the industry.”
In an interview with Financial Advisor on Tuesday afternoon in New York, Weissbluth said that Salient was attractive to HighTower for a number of reasons.
“HighTower today has a trust company and will be able to provide trust services,” he said, but he added that the firm also liked Salient's management team, brand and location in Texas. “We would have absolutely done this deal if they didn’t have a trust company.”
“We started the process with them back in October,” he added. “So it’s been a six-month process. … Sometimes it can take years.”
Weissbluth said HighTower is looking for firms that are still in growth stages and want to maintain that growth. The youth of a target firm's partners is not a factor so much as a company’s momentum.
Last October, private equity firm Thomas H. Lee Partners purchased a significant stake in HighTower and pledged an extra $100 million after the deal’s closing to fund the firm’s expansion. The purchase came after years of speculation about how HighTower would unlock its value for early shareholders who wanted to cash out (there are often rumors of an imminent company sale or IPO). The private equity infusion from Thomas H. Lee allowed HighTower to both expand and create liquidity for shareholders (and scotch the IPO rumors for now).
“Recap was a major piece of it. Growth capital was a major piece of it,” Weissbluth told Financial Advisor. “The reason why we were attracted to THL is that they put a proposal that included both of our objectives, which is to recapitalize our internal shareholder base and provide growth capital. And then we immediately went out into the marketplace and deployed that into Salient.”
Under the deal, Salient Private Client will be rebranded as HighTower Private Client. Salient Private Client’s trust company, Salient Trust Co., will be rebranded as HighTower Trust Services, which will allow HighTower to provide trust services directly to its clients.