New York-based Wentworth Management Services, a holding company that acquires and manages other firms within the wealth management industry, announced it has completed its merger with Kingswood Acquisition Corp. (KWAC), a special purpose acquisition company.
The merger paves the way for Wentworth to go public as a new entity, Binah Capital Group, an independent wealth management firm. Going public will give the firm an advantage when it comes to mergers and partnerships, according to Craig Gould, CEO of Binah Capital, in an interview with Financial Advisor.
“As a public company, I am much more transparent of what’s going on with my business than my private competitor,” he said. “That transparency is what I mean when I say giving the other side of that transaction more certainty on my ability to wind up closing a transaction than a private competitor that you don’t really know what’s going on behind closed doors.”
Wentworth’s business model has been to locate and acquire firms in the financial service space. It is a model that has worked for it since launching in 2017. However, with a competitive M&A market, Gould was looking for a way to offer something that those in the private sector could not.
Gould pointed out that many transactions can take months while both sides await regulatory approval. In that time the entity backing one side of the transaction could pull out, which could result in not only a dead deal, but also a lot of wasted time. By being a public company, Binah can provide the assurance that private firms cannot at the time, he said.
“Our feeling is that as a public company, we should be able to give those entrepreneurs greater certainty that we can get a transaction closed than if we were a private firm with a family office for private entity backing us,” he said.
To facilitate the ability to go public, Wentworth sought out KWAC, a blank-check firm sponsored by British-based Kingswood Group and a sister company to Kingswood U.S., a U.S.-based RIA and independent broker-dealer firm. Kingswood U.S. was not a part of or involved in the Wentworth transaction, according to the firm.
With many private firms reluctant to go public because of the added regulatory scrutiny, Gould said that he has no such concerns. He pointed out that his firm already owns numerous regulated entities, including broker-dealers, RIAs and insurance agencies.
“We are highly regulated as is,” he said. “We look at being public much more as an opportunity than we do as a liability.”
Gould had been serving as the president of Wentworth prior to the final merger and now takes over as the CEO of Binah. In addition, David Shane has been named CFO while the firm’s executive management team is made up of the executives from Wentworth and will report to Gould and Shane.
Shane has years of experience with accounting, fundraising, and wealth management and most recently was the CFO of Indianapolis-based Sanctuary Wealth, according to Gould.
Under the new structure, Wentworth and Kingswood will remain as wholly owned subsidiaries of Binah. The combined entity will be worth about $208 million, with more than 1,900 brokers managing $23 billion in assets, according to the firm.
The four firms that existed under the Wentworth umbrella, Cabot Lodge, World Equity Group, Broadstone Securities, and Purshe Kaplan Sterling Investments, will not be impacted by the merger, Gould said.
Those firms' clients will also not see any changes, as their reps and staff will remain with their respective firms. Gould is optimistic that the ability to go public will ultimately help in the client experience.
“The fact that we have greater access to capital and continue to end up building scale, we think we’ll end up being able to continue to end up driving a better experience for them,” he said.
Michael Nessim, who served as a founding partner and CEO of KWAC, will continue as CEO and managing partner of Kingswood U.S. He will also serve as a shareholder of Binah, along with other members of KWAC. None of them will be involved in Binah's management, the firm said.
Finally, Larry Roth, the former CEO of Cetera Financial Group, announced late last year that he would be serving as executive chairman of the new firm. Roth, who founded and leads RLR Strategic Partners, a New York-based M&A advisory firm, has backed down from that claim.
"Since the prospective executive chair role was first disclosed in December 2022, a number of board appointments for Larry Roth and strategic engagements for RLR emerged that required Larry’s bandwidth and focus,” said a source close to RLR. “As a result, he decided to step back from the potential Executive Chair Role, but he remains a significant shareholder in Binah Capital who is deeply supportive of, and invested in, the company’s future success.”
Gould declined to comment on any plans that Binah might have in terms of future partnerships, although he was optimistic about the future.
“The opportunity for us to be more transparent toward strategic partners and being public to create more certainty in closing transactions going forward is really why we did this,” he said. “We’re very excited about what we can accomplish.”