Sanctuary Wealth, an Indianapolis-based firm that buys stakes in financial advisory firms in order to help them transition to independence, has closed on a $175 million investment from Kennedy Lewis Investment Management, a credit manager in New York City.
Sanctuary announced in a press release today that the funds will be used to accelerate the firm's merger and acquisition strategy and aid the organic growth of its network of partner firms. The investment will also advance "key priorities that will enhance the company's technology solutions and talent management initiatives," Sanctuary said.
"Kennedy Lewis is the ideal partner to help us write the next chapter of Sanctuary Wealth's story," said Jim Dickson, CEO and founder of Sanctuary Wealth, in a prepared statement. "This partnership will propel us forward as we continue to invest in our technology and people, while also empowering our partner firms to reach the next level of their growth potential. Our acquisition strategy will further establish Sanctuary Wealth as an M&A leader in the independent advisory space."
Sanctuary Wealth said it has added 20 new advisor teams from across the U.S. this year with assets under advisement totaling about $25 billion. The firm's partnership program allows breakaway advisors nearing retirement, and without a succession plan, to either fully or partially sell their businesses, Sanctuary said. "In such situations, Sanctuary Wealth may act as a matchmaker to pair the exiting advisor with a partner firm from within the Sanctuary Wealth network, which has a strong appetite for growth through acquisition," the firm said in the release.
The firm's growth was part of the impetus for Kennedy Lewis's investment, said David K. Chene, co-founder of Kennedy Lewis.
"In a short period of time, the Sanctuary Wealth leadership team has built a world-class, client-first business that is poised to continue disrupting the highly fragmented U.S. RIA industry," he said in a prepared statement. "This is an exciting opportunity for Kennedy Lewis to invest behind an innovative platform as it embarks on the next stage of growth."
In an interview with Financial Advisor magazine in March, Dickson was upbeat about the prospects of further consolidation and M&A activity in the advisor industry despite continued global economic turmoil.
Speaking shortly after the start of the Russian invasion of Ukraine, he said, “Similar to when Covid hit, at first everyone freezes, but then in 60 days or 90 days there is a pent-up demand that continues the M&A growth."
Sanctuary Wealth said its services to breakaway advisors rest heavily on a multi-custodial hybrid platform that includes a new bespoke alternative investments platform, a turnkey asset management program offering, insurance solutions, family office services, legacy planning, consumer and business lending solutions and a proprietary work station.