Lightyear Capital, a New York-based private equity firm, and Ontario Teachers’ Pension Plan Board, Canada's largest single-profession pension plan, today announced that they have acquired wealth management firm Allworth Financial from private equity funds managed by Parthenon Capital.
Financial terms of the deal were not disclosed in an announcement released today.
The release did say that the senior management team of Allworth will remain significant shareholders as part of this transaction, which is expected to close in the fourth quarter of 2020, subject to customary closing conditions.
Allworth will become the fifth investment in wealth management by Lightyear’s affiliated investment funds, including successful realized investments in Cetera, Advisor Group, and Wealth Enhancement Group, as well as a current investment in Cerity Partners, said the release. Lightyear also has significant experience investing in companies that leverage technology in marketing to reach consumers, including current investments in Datalot and HealthPlanOne.
The investment by Lightyear and Ontario Teachers’ will enable the Sacramento, Calif.-based Allworth to continue to build its national footprint through systematic acquisitions and multi-channel direct marketing efforts with the goal of becoming one of the premier wealth managers in the U.S. Since 2017, the RIA has completed 10 acquisitions and has grown its client assets under management from $2.4 billion to approximately $10 billion, the release noted.
Scott Hanson, co-founder and senior partner of Allworth Financial, said they are thrilled to be working with Lightyear and Ontario Teachers’ and look forward to leveraging their extensive experience in the financial services and wealth management space. “We are proud of what we have been able to accomplish to date and believe Lightyear and Ontario Teachers’ will help accelerate our pursuit of becoming a national firm that brings unbiased, straightforward retirement planning guidance to thousands of families,” he said in a statement.
“Over the past 27 years we have helped thousands of clients with their retirement planning needs and sought partners who understood the importance of putting clients first. Together with Lightyear and Ontario Teachers’, we look forward to the continued expansion of our client-first model across the country, added Pat McClain, Allworth’s co-founder and senior partner.
Karen Frank, senior managing director, Equities at Ontario Teachers’ said Allworth is an attractive investment given its differentiated and retirement-centric business model as well as industry tailwinds including an aging population and increased demand for professional and holistic wealth planning services. “As fiduciaries to over 300,000 active and retired teachers in Ontario, we understand the critical role that Allworth and its advisors play in providing quality financial planning solutions to its clients,” she said.
And Mark F. Vassallo, managing partner of Lightyear, added, “We believe we have identified another outstanding investment opportunity in wealth management and are very excited to partner with the Allworth team. Allworth has the opportunity to become a national brand name for providing financial advice. This investment is consistent not only with our long-term thesis around the growing need for financial advice, particularly in times of uncertainty, but also with our multiple prior successful investments in the space.”
Founded in 1993, Allworth, formerly known as Hanson McClain Advisors, is a full-service independent investment and financial advisory firm that specializes in retirement planning, investment advising, tax planning and preparation and estate planning for the mass affluent.