Venture capital firm Valeas Capital Partners has agreed to acquire a minor stake in Akron, Ohio-based Sequoia Financial Group LLC, the companies announced today.
The deal calls for the San Francisco-based Valeas to commit to $200 million to support Sequoia’s strategic growth plans. The transaction is expected to close at the end of the month, according to the announcement.
This marks the second strategic investment in Sequoia in two years. New York-based Kudu Investment Management, a provider of capital solutions to asset and wealth managers, made a minority investment in July 2020. Financial terms were not disclosed. Sequoia remains a majority employee-owned firm.
“We are very excited about the overall partnership. We believe that the quality of the people is really paramount,” said Tom Haught, Sequoia’s founder and CEO. “We took a long time to look for the right people and we feel good about the choice we made,” he told Financial Advisor.
Haught said the benefit of having Valeas as a partner is not only their commitment of capital but also their ability to scale up as Sequoia continues to grow. He explained that It’s hard for both the employee shareholder base and Kudu to scale up and add more capital.
Sequoia will be Valeas’ cornerstone U.S. wealth management investment, Haught noted. Valeas was founded in 2021 by Rob Little and Ed Woiteshek, who previously worked at private equity firm Hellman & Friedman. Haught said that Sequoia will be the firm’s third portfolio company and first in the financial services sector. Little and Woiteshek will serve on the Sequoia board of directors at the close of the transaction.
“What was attractive to us was the quality of the people and the team that they had built, and their deep knowledge of financial services based on their prior employer,” Haught said. “We felt it to be a good combination.”
Little, in a statement, said, “Sequoia has a proven strategy and a strong, client-centric culture. We are thrilled to partner with Tom and Sequoia’s extremely talented team.”
Haught said Sequoia has been fortunate to have grown the firm both organically and inorganically. Its organic growth rate is 15% and its inorganic rate is 25%, he said. “So, to support both of those initiatives, there’s obviously a big talent investment in adding to our team and adding specialists to our team to focus on our end clients and to go deeper into specialties that we developed,” he said.
Also of importance, Haught said, is technology investment to support team members and allow them more time to spend with clients. And there also is the need for capital as they acquire other firms.