Rockford, Ill.-based fee-only giant Savant Capital Management announced Wednesday morning that it had merged with Huber Financial Advisors, another Chicago-land firm, to forge an $8 billion behemoth among registered investment advisors.
Huber, founded in 1988 by David Huber, will take Savant's name as part of the marriage, according to a news release the two companies issued. The two firms are expected to be integrated by March 31.
Founded by Thomas Muldowney in 1986, Savant is helmed by Brent Brodeski and has offices in Illinois, the D.C. Metro Area, New Mexico and Wisconsin. The firm has made eight acquisitions since 2012 and recapitalized and restructured in order to pursue its acquisition strategy, pay out to older partners and remain independent. At the end of 2016, for instance, the firm raised capital in part from asset manager Cynosure Group and three single-family offices, the Vlasic Group, Bootstrap Capital and Nonami Investments.
The transaction will primarily be funded with Huber employees’ rolling equity and other employees buying into the new entity, Brodeski noted.
Brodeski, Savant’s CEO, said the transaction represents two decades of mutual respect for each other’s organizations. “From a client perspective, Huber has been at the top of my partnering list for the last three years, and the reason is that there is nothing that we are not aligned on,” he said.
“There is a bunch of capabilities that we can bring to the table, which include things like Savant Private Trust, our tax accounting group and some technology that we have invested in that fills the need for them and can really provide additional capabilities to their clients. On the flip side, they have been very innovative on things like advisor development, advisor training, and they have been successful on custodial referral programs, which is something we struggle with,” Brodeski said.
He added that there is great synergy from the employee perspective in that the strength and interests of the key people don’t overlap.
The partnership increases Savant’s assets under management in the Chicagoland region to $3.1 billion and $8 billion overall, and the new entity employs over 200 people. “So it’s a bigger stage for all of our team with additional capabilities,” Brodeski said.
“It’s kind of like when two different rock stars come together and sing together … they are great individually, but if you put them together, my gosh, that’s an amazing combination,” he noted. “I think it’s going to be transformational within the market, but when you look at the benefits of our team to perform on a larger stage and write our music together, it’s going to be very impactful for all of our constituents—the clients, our team and also the shareholders.”
He pointed out that after the integration, the owners of Huber will transition their current equity into Savant, and several plan to increase their stake over time. In addition, several additional Huber Financial Advisors team members will become Savant owners at closing. Once the parts are combined, Savant will have more than 70 employee owners and remain both employee-led and controlled. Savant will have broader employee ownership than nearly any other advisory firm in the industry, Brodeski said.
“What Savant is trying to accomplish is not just buying a bunch of firms and then sell them to the highest bidder in three to five years. We want to build the best operating company that’s employee-owned and employee-led that has a long runway that puts us on a path to improve a million lives over the next 25 years.”
This transaction, he said, puts the firm on a different trajectory. “It puts us in the mega-RIA league, but it also is kind of bull’s-eye as it pertains to creating an Arthur Andersen-like firm, excluding Enron.”
Huber, who will have an advisory role to Savant’s board of directors in addition to working with clients, said the entire team is delighted to be partnering with Savant. He also noted that Rob Morrison, Huber’s president, will become a member of Savant’s executive team; Phil Huber will continue his role as chief investment officer.