Advisory M&A News – 10/23/23

Mercer acquires Kingfisher Capital; Sequoia to add M Capital Advisors; Charles Drew Group joins UBS.


Sequoia Financial Group to Acquire M Capital Advisors

Sequoia Financial Group LLC, which provides wealth management and retirement planning, announced it has entered into an agreement to acquire M Capital Advisors. The firms expect the transaction to close by Oct. 31.

M Capital, based in Nashville, Tennessee, with an office in San Antonio, has $930 million in assets under management as of September 30. Its clients are high-net-worth individuals, families and institutions.

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“Becoming part of Sequoia Financial will provide M Capital clients with broader and more tailored wealth management solutions, especially in the high- and ultra-high-net-worth areas, supported by Sequoia’s extensive operational, technological, and financial resources,” Frank Mastrapasqua, founder and chairman of M Capital, said in a statement. “Sequoia’s talented national wealth advisor team is second to none.”

Formed in 1993, M Capital employs a team of 13 professionals. Alongside Frank Mastrapasqua, the firm is led by CEO Mauro Mastrapasqua, chief portfolio strategist Edwin Barton, CIO Patrick Snell and principal and portfolio manager Claude Koontz.

Charles Drew Group Joins UBS

UBS, which provides wealth management and retireman plan advisement, announced that a four-person adviser team, the Charles Drew Group, has joined the firm. The team will be based out of UBS’ Washington, D.C. office, part of its Philadelphia D.C. wealth management market.

The team, which manages $460 million in client assets, is led by managing director and financial adviser Charles Drew and includes financial advisers Bennett Kavlick and Matthew Tomczuk and client service associate Justin Hatch.

“Charles is a very talented adviser with decades of experience, and we are proud to welcome him and his team to UBS,” Julie Fox, a Philadelphia D.C. market executive at UBS Private Wealth Management, said in a statement. “Hiring productive advisers like Charles is a key priority for us in the important Washington, D.C. market.”

Previously Drew was a senior financial adviser with Merrill Lynch Wealth Management in Washington, which he joined in 1994. He was named to the Forbes/Shook Research Best-in-State Wealth Advisors list for 2023.

Mercer Advisors Acquires Kingfisher Capital LLC

Wealth management and financial planner Mercer Global Advisors announced the acquisition of Kingfisher Capital LLC, a wealth management firm located in Charlotte, North Carolina.

KC is an ideal fit for us,” Dave Welling, CEO of Mercer Advisors, said in a statement, “Together with our already strong presence in the South/Southeast, we present a formidable juggernaut. We are thrilled they are joining the Mercer Advisors team and look forward to working together to deliver meaningful results for our shared clients.”

KC was founded by Alexander Miles and H.K. Hallett in 1989. The firm serves approximately 210 clients with assets under management of approximately $630 million.

“After a comprehensive search, we were introduced to David Barton, vice chairman at Mercer Advisors, who leads mergers and acquisitions for Mercer Advisors,” Hallett said in a statement. “After meeting with Dave, we knew we had found the right partner that was not only a national family office RIA with institutional investment capabilities, but also a firm with dozens of estate planning lawyers, a dedicated team of CPAs and other tax professionals, and corporate trustee and other services in-house, and all under one roof.”

TDF Assets Through Q3 Dip Slightly, Still Outpacing ‘22

American Funds had the strongest inflows for a second consecutive quarter among the top ten TDF providers, according to Simfund, as target-date-fund assets in the group ended less than Q2 at $1.58 trillion.

Assets in target-date funds among the top ten providers through the third quarter of 2023 ended down from Q2 but are still on pace to exceed those of a relatively down year in 2022, according to the latest data from ISS Market Intelligence’s Simfund.

Total investor assets in TDF strategies among the top ten managers landed at $1.58 trillion through the first three quarters of the year, dropping below total at the end of Q2, $1.63 trillion, according to data provided by Simfund, which, like PLANADVISER, is owned by Institutional Shareholder Services Inc. Both figures are greater than 2022’s $1.46 trillion in total assets in TDF investments.

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TDF Assets ‘20 $MM, Top 10 Providers

TDF Assets ‘21

TDF Assets ‘22

TDF Assets Q2 ‘23

1,549,922

1,765,407

1,459,159

1,580,527

The slight decline comes amid market volatility and weaker traffic moving into TDFs. When taking into account both inflows and outflows, total assets going into TDFs were $8.17 billion in Q3, compared with $10.84 billion in Q2, according to the data.

Those inflows were off a high for the year of $17.5 billion in Q1, which had followed a dismal total outflow picture for TDFs in Q4 2022 of negative $7 billion.

The leader of those top 10 TDF inflows was American Funds, owned by Capital Group, for the second consecutive quarter at $3.97 billion. BlackRock Inc. had the second most inflows at $2.34 billion, and the Vanguard Group was third at $2.13 billion, according to Simfund’s data.

TDF managers hit most by outflows in the quarter were J.P. Morgan Funds at negative $2.2 billion, T. Rowe Price at a decline of $894 million and American Century at $253 million in outflows.

When tracking just inflows into TDFs by manager, BlackRock overtook Vanguard for the second strongest investments as compared with last quarter. Meanwhile, Fidelity Investments slipped from third to fourth for net new flows, and TIAA overtook State Street Global.

TDF Manager

Q3 Net New Flows, MM

American Funds

3,974.8

BlackRock

2,538.2

The Vanguard Group

2,125.9

Fidelity

1,556.1

TIAA

897.7

State Street Global

225.4

MFS

155.8

Schwab

147.9

PIMCO LLC

126.2

Principal Funds

63.1

Total

$11.8 Billion

2023 is on pace to mark another year-over-year increase for TDF assets, the most popular investment vehicle within workplace retirement plans.

If the year does indeed land above 2022’s $1.46 trillion in assets, the total assets in the investment strategy will have grown year-over-year in every 12-month period except for three going back to 1990, according to Simfund.

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