Private equity firm Genstar Capital is expected to buy a controlling interest in the fast-growing RIA Cerity Partners in a deal that will be announced next week, according to published reports.
Cerity is now majority-owned by Lightyear Capital, another private equity firm that could retain a minority stake in the RIA or exit completely eventually, according to Barron’s and Citywire. Genstar and Cerity did not return calls for comment.
Cerity has more than $50 billion in assets under management and has been setting a fast pace of acquisitions and mergers this year. The firm is valued at $1.6 billion. The amount San Francisco-based Genstar is paying has not been revealed. That enterprise valuation represents a multiple of more than 20 times Cerity Partners’ Ebitda, the reports said.
Headquartered in New York City, Cerity Partners had been looking for a new partner since spring because Lightyear Capital reportedly wanted to remove itself from the firm and had hired Raymond James to oversee the exit.
Cerity, which is led by CEO Kurt Miscinski, specializes in advising wealthy individuals, families and retirement plans. Lightyear Capital invested in the firm’s predecessor in 2018 and rebranded it Cerity. The RIA has offices in nine states.
Cerity has been on a buying spree this year, acquiring three firms each with a total of at least $1 billion in AUM. The firms are Brouwer & Janachowski in the San Francisco area, Daintree Advisors in Boston and Investec Wealth Strategies in Houston.
Cerity Partners told some news publications in an email statement, “We are excited to welcome an investment fund affiliated with Genstar Capital as a new shareholder whose capital will allow us to retain meaningful employee ownership and continue investing in our people, systems, and capabilities—facets of our firm that enhance value for our clients and colleagues.”
Genstar, which has about $35 billion in assets under management, currently also owns Cetera Financial Group, Mercer Advisors, and Orion Advisor Solutions.