It's been confirmed that San Francisco private-equity firm TPG is taking a minority stake in the Overland Park, Kan.-based RIA firm Creative Planning.
Over the weekend, TPG was reported to be the likely frontrunner in an auction to acquire a $2 billion minority interest in Creative Planning, the fast-growing Kansas RIA, according to a Reuters report on Saturday. Sources cited by Reuters and others said the investment could value Creative Planning, which manages or advises on more than $300 billion in assets, at $15 billion or more.
If completed, the investment could set a new valuation standard for large RIA aggregators. General Atlantic acquired a minority interest in Creative Planning in 2020. General Atlantic is believed to be looking to reduce its current stake in Creative Planning as part of the contemplated capital raise.
According to SEC filings, Creative Planning’s CEO and founder Peter Mallouk owns between 50% and 75% of the firm, which is believed to have several share classes of equity. The Kansas-based firm, which has more than 2,000 employees, has also acquired dozens of small- and mid-sized RIAs, many of which received a combination of cash and equity when they sold their firms.
Additionally, Creative Planning is also thought to have more than $1 billion in debt, including continuing payments to various parties. Nonetheless, such a deal would value Mallouk’s stake in the business at more than $5 billion.
For TPG, an investment in Creative Planning would come less than a week after it acquired a minority stake in Homrich & Berg, a leading RIA in the Atlanta market managing about $17 billion. TPG’s interest in the independent advisor business can be traced to 2005, when it teamed up with Hellman & Friedman to acquire LPL Financial for $2.5 billion. In 2010, LPL Financial went public.