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Deals & People October 4, 2023
Genstar Capital Re-Ups to Keep Driving Cetera M&A Plans
Having originally invested in Cetera in 2018, Genstar will continue to be the majority investor and lead partner.
Reported by Natalie Lin
Cetera Financial Group, owned by Cetera Financial Group Inc., announced a reinvestment by Genstar Capital LLC, a private equity firm focused on investments in targeted segments of the financial services, software, industrial and health care industries. The firms did not disclose the amount of funding.
Genstar’s latest investment will continue to drive growth for Cetera that has so far included the acquisition of registered investment advisories to build its footprint. In August, Cetera Financial Group retained more than 91% of the 1,0000 financial professionals from Securian Financial Group’s retail wealth and trust businesses, sealing a deal announced at the start of the year.
The new investment is led by Genstar’s newest fund, Fund XI, with additional capital from Fund X, according to an announcement on Wednesday. Genstar originally invested in Cetera in 2018 and will remain as majority investor and lead partner.
“This reinvestment from Genstar affirms Cetera’s proven ability to create value,” Cetera Holdings CEO Mike Durbin said in a statement. “Secular tailwinds and continued economic growth underpin confidence in Cetera’s future.”
Durbin joined Cetera in May after holding a senior leadership role at Fidelity Investments as head of its institutional investing division. Durbin took a seat on Cetera’s board, while Cetera Financial Group CEO Adam Antoniades remained in his role and his board seat.
“The management team has high conviction in its strategy and vision for Cetera as a wealth hub going forward and appreciates Genstar’s partnership in pursuit of long-term success,” Antoniades said in a statement.
Since 2018, Cetera has grown from approximately 7,000 advisers and 1,300 employees supporting $242 billion of assets under administration to approximately 9,000 advisers and 2,000 employees supporting $374 billion of AUA, according to Antoniades.
In June, Cetera Holdings announced the purchase of $1.4 billion registered investment advisory the Retirement Planning Group LLC, which advises individual clients on retirement and wealth management.
Genstar has been active in retirement investing and solutions, including an investment in AmeriLife Group LLC in June 2022. Mergers and acquisitions activity among RIAs in the year’s third quarter has already outpaced the same period in 2022, according DeVoe & Co. The deals are mostly focused on RIA acquisitions, either by wealth management advisories or employee benefit aggregators. There has also been further consolidation among workplace retirement plan advisories after years of aggregation.
Moelis & Co. LLC and Morgan Stanley & Co. LLC served as financial advisers on the transaction, while Willkie Farr & Gallagher LLP served as legal counsel to Cetera and Genstar. The transaction is expected to close in the fourth quarter of 2023.