Private Equity Firm Buys Majority Stake in NFP Advisor Services

Private Equity Firm Buys Majority Stake in NFP Advisor Services

NFP will sell a majority stake in its independent broker/dealer NFP Advisor Services to Stone Point Capital, a Greenwich, Conn.-based private equity firm that invests in financial services companies.

NFP, backed by Madison Dearborn Partners, will maintain 20 percent ownership the firm, which has been rebranded Kestra Financial as part of the deal.

Douglas Hammond, NFP chairman and CEO, said the deal allows his firm to focus on its core businesses—insurance brokerage and consulting. Hammond will serve on the board of directors of Kestra, and NFP will continue to be one of the b/d’s largest clients. Kestra will continue to serve as the preferred broker/dealer and RIA for NFP offices and membership organizations.

Fusion Advisor Network, NFP’s network of high-end independent advisors that provides business management and collective bargaining services to its members, is included in the transaction.

The deal is expected to close in the next three months; terms were not disclosed.

Kestra’s new parent, Stone Point, is a private equity firm specializing in the financial services space, with investments in firms including Broadstone Real Estate, Cross Ocean Partners, New Ocean Capital Management and CIT Group. The firm has raised six private equity funds, making up about $13 billion in committed capital. 

James Poer, the head of NFP Advisor Services and president and CEO of Kestra, said that while NFP Advisor Services was growing, it did not have a strong branding position in the advisory space.

“NFP’s brand is pretty strong, but NFP’s brand is very aligned with corporate benefits, insurance and property and casualty,” Poer told WealthManagement.com.

“Here we are, an RIA and b/d platform provider, and it was really hard to effectively establish the brand for what we did.”

So the firm decided to separate from NFP and choose a new name; Kestra comes from the kestrel hawk, “which is known for being nimble, being quick, and having great vision,” Poer said. “We really liked that correlation for our organization.”

The transition to the new owner will not involve any re-papering of accounts for the firm’s 1,700 advisors. NFP Advisor Services owns eight RIA firms, which join Kestra as part of the transaction. 

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